ADELPHIA COMMS: Decides to Abandon Most Preference Actions----------------------------------------------------------The Adelphia Communications (ACOM) Debtors determined that in light of the anticipated recoveries for unsecured creditors as contemplated by the Plan and the business sensitivities associated with pursuing certain of the Potential Preference Actions against third parties with whom they wish to continue doing business, the costs associated with pursuing these Potential Preference Actions far outweigh any potential benefit to their estates that might otherwise result from bringing the actions.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, LLP, relates that the ACOM Debtors initiated the process of analyzing potential preferential transfers with the filing of their Statements of Financial Affairs on July 31, 2003. These Statements included a schedule of each payment made within the one-year period before the Petition Date to "insiders," as the term is defined under Section 101 of the Bankruptcy Code, and, in the case of "non-insiders," the 90-day prepetition period.

Since that time, the ACOM Debtors participated in weekly meetings, during which their counsel assisted in analyzing and answering questions they posed relative to the Preference Analysis. In addition, the ACOM Debtors' counsel, including Boies, Schiller & Flexner, LLP, met with counsel to the Official Committee of Equity Security Holders and counsel to the Official Committee of Unsecured Creditors to formulate and agree to a definitive course of action and an allocation of responsibility with respect to pursuing and abandoning a broad spectrum of avoidance actions, including those covered by the Preference Analysis.

(2) The ACOM Debtors' counsel will analyze, and potentially bring, certain preference actions related to transfers made by or for the benefit of the Holding Company Debtor Group. The Holding Company Debtors are:

(3) Boies will analyze and consider amending the complaint filed against the Rigas family to add additional parties and additional causes of action, including, but not limited to, preference actions against the Rigases;

(5) The counsel to the Equity Committee will conduct certain related research.

To facilitate the Preference Analysis, the ACOM Debtors developed certain criteria to sort through around 7,500 transfers made during the Preference Period. First, potential preferential transfers were divided into two categories:

(1) transfers made by or for the benefit of the Holding Company Debtor Group; and

(2) transfers made by or for the benefit of the balance of the ACOM Debtors.

Based on the Debtors' calculations to date, there were approximately $33,736,730 of transfers made by the Holding Company Debtor Group and $1,644,399,746 of transfers made by the Operating Subsidiaries Group during the Preference Period.

Within the Holding Company Debtor Group and the OperatingSubsidiaries Group, the vast majority of transfers were divided into these sub-categories:

(1) transfers related to contracts that the ACOM Debtors intend to assume, including franchise and pole attachment agreements and other agreements related to their core businesses;

(2) transfers related to investment and cash management activities that are not covered by the Creditors Committee's action brought against certain prepetition lenders;

(3) transfers made to taxing authorities;

(4) transfers made to legal, financial and other professionals;

(5) transfers related to human resources services;

(6) other ordinary course of business payments; and

(7) transfers made to non-insider third-parties where the aggregate amount transferred to any third party in the Preference Period was less than $100,000.

The ACOM Debtors specifically seek to abandon the Potential Preference Actions in these categories:

(1) Intended Assumption Category;

(2) Taxing Authorities Category;

(3) HR Category;

(4) Ordinary Course Category;

(5) De Minimis Category; and

(6) the vast majority of transfers made by or on behalf of the Debtors within the Operating Subsidiaries Group.

Categories of Potential Preference Actions related to transfers made by or on behalf of the ACOM Debtors in the Operating Subsidiary Group and the Holding Company Debtor Group that the ACOM Debtors are continuing to investigate, and to the extent they exist, intend either to preserve through tolling agreements or to prosecute by filing complaints are:

(1) transfers to certain contract parties and parties with whom the ACOM Debtors transacted business in the Preference Period;

(3) transfers related to investment and cash management activities that are not covered by the Creditors Committee's complaint against certain prepetition lenders;

(4) transfers made to professionals;

(5) transfers made to Insiders;

(6) transfers made by one ACOM Debtor to another ACOM Debtor;

(7) certain fraudulent conveyance actions; and

(8) any other avoidance action not specifically addressed, including, without limitation, any avoidance action relating to any adversary proceeding pending as of April 21, 2004.

Based on the anticipated recoveries contemplated by the Plan for unsecured creditors of the Operating Subsidiaries Group and the legal standard required to determine whether a transfer constitutes a preference, there can be no certainty that the estates would be able to successfully prosecute the Potential Preference Actions against the ACOM Debtors' transferees in the Operating Subsidiaries Group during the Preference Period. The legal standard provides that the transfer would enable that creditor to receive more than it would receive if:

(1) the case were under Chapter 7;

(2) the transfer had not been made; and

(3) the creditor received payment of the debt.

Ms. Chapman points out that even if the legal standard could be met, the net benefit to the estate in successfully recovering the transfers would be de minimis given the offsetting increase in asserted claims that will be compensated via distribution of 100% of the allowed amount of the claim.

Moreover, the nature of certain of the Potential Preference Actions in each of the Categories obviates the need for the ACOM Debtors in either the Holding Company Debtor Group or the Operating Subsidiaries Group, as applicable, to pursue the Potential Preference Actions:

(A) Intended Assumption Category

The ACOM Debtors in both the Holding Company Debtor Group and the Operating Subsidiaries Group determined that they likely will assume certain contracts, including franchise and pole attachment agreements, and other agreements related to their core businesses. Upon the assumption of these contracts, it is well established that the Preference Actions can no longer be pursued.

(B) Taxing Authorities Category

The ACOM Debtors in both the Holding Company Debtor Group and the Operating Subsidiaries Group made numerous payments to various taxing authorities during the Preference Period. Pursuant to the Plan, were the ACOM Debtors to recover the transfers from the transferees, the transferees would have Priority Tax Claims, which, pursuant to the Plan, would be fully paid in cash.

(C) HR Category

The ACOM Debtors in both the Holding Company Debtor Group and the Operating Subsidiaries Group made numerous transfers to entities during the Preference Period that provided the ACOM Debtors' employees with certain employee related services, including health insurance, 401K services and other benefits. Any attempt to recover these transfers would likely have an adverse impact on necessary HR benefits provided to the ACOM Debtors' employees.

(D) Ordinary Course Category

The ACOM Debtors in both the Holding Company Debtor Group and the Operating Subsidiaries Group made certain transfers that a court likely would determine to have been made in the ordinary course of business, within the meaning of Section 547(c)(2)(B) of the Bankruptcy Code. The transfers include, but are not limited to, monthly rent payments.

(E) De Minimis Category

The ACOM Debtors in both the Holding Company Debtor Group and the Operating Subsidiaries Group made numerous transfers to non-Insider third-parties during the Preference Period totaling $100,000 or less. The cost of pursuing the actions would likely exceed any benefit to be realized by the ACOM Debtors' estates for doing so.

Rather than expend their time, resources and funds in pursuing Potential Preference Actions, which would yield no material benefit to their estates, the ACOM Debtors determined that abandoning the Potential Preference Actions is appropriate for their estates and stakeholders. In addition, since many of the entities of the preference actions to be abandoned continue to provide the ACOM Debtors with valuable services, the ACOM Debtors determined that abandoning the Potential Preference Actions would help avoid damage to those relationships. (Adelphia Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)

AIR CANADA: Court Authorizes Canadian Pension Contributions-----------------------------------------------------------At Air Canada's request, Mr. Justice Farley modifies the Initial CCAA Order so the company may remit contributions into each of its Canadian defined benefit registered pension plans.

Ashley John Taylor, Esq., at Stikeman Elliott, LLP, in Toronto, Ontario, explains that the current service contributions to the Canadian registered pension plans for the first quarter 2004 were due on April 30, 2004. The Initial CCAA Order precludes the Applicants from making contributions to their pension plans without CCAA Court approval.

Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000)

In addition, Standard & Poor's assigned its 'B' bank loan rating and its recovery rating of '3' to the company's proposed $175 million secured revolving credit facility maturing in 2009. The 'B' rating, which is the same as the corporate credit rating, and the '3' recovery rating indicate a meaningful recovery (50% to 80%) of principal in the event of a default.

Standard & Poor's also assigned its 'CCC+' rating to the company's proposed $200 million senior unsecured notes maturing in 2012. Alpha will use the proceeds from the senior note offering to refinance existing debt and distribute $110 million to management and its equity owners, First Reserve Corp. and Affiliates of American Metals & Coal International.

Compared with some of its peers, Alpha, with 326 million tons of coal reserves, is a relatively small coal producer, producing less than 20 million tons in 2003. Since the company's inception in 2002, Alpha has acquired four companies with operations primarily in the Central Appalachia coal region. The majority of the company's production (80% in 2003) is from underground mines, which are more costly and fraught with a higher degree of operational risks in comparison to surface mines. With the majority of the company's coal reserves located in the difficult operating environment of Central Appalachia, Standard & Poor's expects Alpha's unit costs to gradually increase from an already-high $30.67 per ton in 2003.

The outlook is stable. Alpha's low legacy liabilities and favorable coal characteristics should enable the company to remain profitable. However, free cash flow will remain thin, and the difficult operating environment could result in higher debt levels.

APPLICA INC: Incurs First-Quarter Loss of $4.5 Million------------------------------------------------------Applica Incorporated (NYSE: APN) announced that first-quarter sales for 2004 were $132.5 million, an increase of 9.3% from the same period in 2003. The increase was largely the result of growth in sales of Black & Decker(R) branded products benefiting from better point-of-sale of such products, as well as retailers beginning the year at lower inventory levels.

Applica reported a loss for the 2004 first quarter of $4.5 million, or $0.19 per diluted share, compared with earnings of $19.6 million, or $0.83 per diluted share, for the 2003 first quarter. The first-quarter 2003 earnings included $37.5 million ($22.5 million, net of tax) of equity in the net earnings of a joint venture in which Applica owned a 50% interest.

Applica's gross profit margin decreased to 28.3% in the three-month period ended March 31, 2004 as compared to 30.5% for the same period in 2003. The gross profit margin decrease was primarily attributed to manufacturing retrenchment, higher raw material costs, higher inbound freight costs and start-up costs related to the Home Cafe(TM) single-cup brewing system.

At March 31, 2004, total debt as a percentage of total capitalization was 30.6%, with total debt of $103.2 million and shareholders' equity of $233.8 million. The Company's book value per share was $9.80 at March 31, 2004. Capital expenditures for the first three months ended March 31, 2004 and 2003 were $4.3 million and $6.3 million, respectively.

Harry D. Schulman, Applica's President and Chief Executive Officer, commented, "Business is off to an excellent start as we are excited about our top line growth in the quarter. We are confident that our business will gain momentum throughout the year. Two new products launched this week, the Home Cafe(TM) single-cup brewing system and the Tide(TM) Buzz(TM) ultrasonic stain removal system, both co-developed with The Procter & Gamble Company, should contribute to exceptional growth."

Applica Incorporated and its subsidiaries (S&P, B Corporate CreditRating, Negative Outlook) are manufacturers, marketers anddistributors of a broad range of branded and private-label smallelectric consumer goods. The Company manufactures and distributessmall household appliances, pest control products, homeenvironment products, pet care products and professional personalcare products. Applica markets products under licensed brandnames, such as Black & Decker(R), its own brand names, such asWindmere(R), LitterMaid(R) and Applica(R), and other private-labelbrand names. Applica's customers include mass merchandisers,specialty retailers and appliance distributors primarily in NorthAmerica, Latin America and the Caribbean. The Company operatesmanufacturing facilities in China and Mexico. Applica alsomanufactures products for other consumer products companies.Additional information regarding the Company is available athttp://www.applicainc.com/

AQUATIC CELLULOSE: Recurring Losses Raise Going Concern Doubt-------------------------------------------------------------Aquatic Cellulose International Corp. is incorporated under the laws of the State of Nevada. The Company's current mission is to reorganize the business of the company to shift from the underwater wood business to that of oil & gas by acquiring long-term, producing oil and natural gas property assets. In addition, the Company will seek to acquire the TigeroLynk(TM) large scale manipulator technology, formerly known as the ATH technology, as a wholly owned subsidiary. The Company would then seek to develop the opportunities for the technology in multiple industry sectors ( - Oil & Gas - Harbor & Waterway Remediation - Military - Mining & Construction ). In June 2003, the Company signed a Memorandum of Understanding with Legacy Systems Corp. to merge the public Company with the Tiger-Lynk robotic technology, patented and owned by Gary Ackles, former Company CEO. During September 2003, the Company signed a Memorandum of Understanding, followed in December 2003, by a Letter of Intent with Century Resources Inc. of Houston, Texas, for the acquisition of Century by the Company. These two agreements with Century negate and preclude all other agreements between Legacy, Century and the Company and outline the intent to amalgamate Century and the TigerLynk technology with the Company.

Aquatic Cellulose International Corporation has experienced recurring losses, has a working capital deficiency of $1,926,834 and an accumulated deficit of $7,306,949 as of August 31, 2003 and during the fiscal year ended May 31, 2003 ceased its underwater timber harvesting operations due to the lack of financing and working capital. These factors, among others, raise substantial doubt as to its ability to continue as a going concern.

Management plans to obtain sufficient working capital from external financing to meet the Company's liabilities and commitments as they become payable over the next twelve months. The Company plans to obtain the approval of its shareholders to increase the total number of authorized shares to allow for conversion of debentures and sell additional common shares for cash. As of August 31, 2003, the Company did not have any firm commitments to obtain adequate financing, however subsequently the Company and its convertible debenture holders agreed to an additional funding of $900,000 based on a new repayment arrangement. There can be no assurance that management's plans will be successful. Failure to obtain sufficient working capital from external financing will cause the Company to curtail its operations.

ARCHIBALD CANDY: Engages Paragon to Advise on Laura Secord Sale---------------------------------------------------------------Archibald Candy Corporation announced that it has commenced a process to sell Laura Secord, one of Canada's leading marketers and retailers of boxed chocolates, scooped ice cream and other confectionery items.

Jim Ross, Archibald's Chief Restructuring Officer, said, "We're proud of our association with Laura Secord during the past five years. We believe the company is well positioned for continued growth and success. Laura Secord is known for its quality product and strong brand name. It also has extremely loyal customers, a solid management team, and dedicated personnel. It has taken significant steps that will enable it to thrive and to realize its full potential as a stand-alone business. With these achievements in place, the time is right to enable Laura Secord to maximize its potential under new ownership while securing a full and fair price for our financial stakeholders. We're committed to a process that will achieve these goals."

Archibald has engaged Paragon Capital Partners, LLC, an investment banking firm based in New York, to advise on and assist in the sale of Laura Secord. Recently, Paragon advised in the sale of Archibald's Fannie May and Fanny Farmer businesses to Alpine Confections Inc. for US$38.9 million.

Tim Weichel, President of Laura Secord, said, "We welcome this sale process, we're excited about the opportunity it presents, and we face our future with confidence. The steps we've taken in anticipation of this process will significantly enhance the company's position and prospects. We've strengthened our senior and mid-level management teams, secured a source of supply with Ganong Bros. Ltd., appointed and transitioned to Spectrum Supply Chain Solutions as our logistics services provider, and resumed direct control of our distribution and information technology functions. These and other strengths will enable us to develop and implement the strategies that will build our business and create value."

The potential sale of Laura Secord had been explored during 2003. Archibald was pleased with the interest expressed by a wide range of qualified buyers. However, events surrounding Archibald during that process made it difficult to proceed towards an agreement. Since then, matters have been clarified with Archibald's Chapter 11 filing, the securing of Laura Secord's supply agreement, and other strategic and operational initiatives which have enabled Laura Secord to operate as an increasingly stand-alone business.

This announcement represents the latest restructuring measure undertaken by Archibald in the United States in recent months. These measures include initiating Chapter 11 proceedings, selling its Fannie May and Fanny Farmer businesses, ending production at its Chicago manufacturing plant, closing its U.S. retail stores, and entering into settlement agreements with its unions for the benefit of former employees.

Founded in 1913, Laura Secord operates 166 retail shops, distributes its products in more than 2,000 third party retail outlets across Canada and has 1,600 employees. Laura Secord's business is conducted by Archibald Candy (Canada) Corporation, a wholly-owned subsidiary of Laura Secord Holdings Corporation, which is a wholly-owned subsidiary of Archibald. Archibald Candy (Canada) Corporation is not a direct party to Archibald's U.S. bankruptcy proceeding.

The mortgage pool consists of closed-end, first lien subprime mortgage loans that may or may not conform to Freddie Mac and Fannie Mae loan limits. As of the cut-off date (May 1, 2004), the mortgage loans have an aggregate balance of $1,000,000,254. The weighted average loan rate is approximately 7.04%. The weighted average remaining term to maturity (WAM) is 354 months. The average cut-off date principal balance of the mortgage loans is approximately $177,305. The weighted average original loan-to-value ratio (OLTV) is 84.46% and the weighted average Fair, Isaac & Co. (FICO) score was 612. The properties are primarily located in California (32.50%), Florida (8.47%) and Illinois (7.84%).

Approximately 92.81% of the loans were originated or acquired by Argent Mortgage Company, LLC (Argent), and 7.19% of the loans originated or acquired by Olympus Mortgage Company. Both mortgage companies are subsidiaries of Ameriquest Mortgage Company, a specialty finance company engaged in the business of originating, purchasing and selling retail and wholesale subprime mortgage loans. Both Argent and Olympus focus primarily on wholesale subprime mortgage loans.

ARMKEL: Church & Dwight Acquisition Prompts S&P's Positive Watch ----------------------------------------------------------------Standard & Poor's Ratings Services placed the ratings on personal care product manufacturer Armkel LLC on CreditWatch with positive implications. This follows the announcement that Church & Dwight Co. Inc. (BB/Stable/--) will purchase the remaining 50% interest in the company that it does not already own from Kelso & Company for $254 million.

The ratings on Princeton, New Jersey-based Church & Dwight are affirmed. The transaction, which is subject to customary closing conditions, is expected to be completed on or about May 30, 2004.

Armkel had about $370 million of funded debt as of Dec. 31, 2003, and Church & Dwight had about $400 million.

"Standard & Poor's believes that upon completion of the planned transaction, Armkel's ratings will be raised to be in line with Church & Dwight's," said Standard & Poor's credit analyst Patrick Jeffrey. In the near term, Standard & Poor's expects that this transaction will increase leverage for the combined entity. However, Church & Dwight has been operating the Armkel joint venture since acquiring a 50% interest in 2001. As a result, integration risk is expected to be minimal after closing. Moreover, the improved business profile of the consolidated entity should largely offset the increase in debt. Furthermore, the operating stability and cash-generating ability of the combined company should help reduce debt leverage in the intermediate term.

Armkel manufactures and markets a variety of personal care and specialty items, including Trojan condoms, Nair depilatories, and First Response pregnancy/ovulation test kits.

ASP VENTURES: Auditors Express Going Concern Doubt --------------------------------------------------As of December 31, 2003, ASP Ventures Corporation had no significant assets. Management believes that the Company has sufficient resources to meet the anticipated needs of the Company's operations through at least the calendar year ending December 31, 2004 though there can be no assurances to that effect, as the Company has no revenues and its need for capital may change dramatically if it acquires an interest in a business opportunity during that period. Further, the Company has no plans to raise additional capital through private placements or public registration of its securities until a merger or acquisition candidate is identified though it may rely on loans from shareholders for capital and the issuance of equity, as required, to ensure its ability to maintain its continuous disclosure requirements.

The Company has no current plans for the purchase or sale of any plant or equipment.

The Company has no current plans to engage any employees.

The Company's audit expressed substantial doubt as to the Company's ability to continue as a going concern as a result of recurring losses, lack of revenue-generating activities and an accumulated deficit of $1,211,428 as of December 31, 2003. The Company's ability to continue as a going concern is subject to the ability of the Company to realize a profit and /or obtain funding from outside sources. Management's plan to address the Company's ability to continue as a going concern, include: (1) obtaining funding from private placement sources; (2) obtaining additional funding from the sale of the Company's securities; (3) establishing revenues from a suitable business opportunity; and (4) obtaining loans and grants from various financial institutions, where possible. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.

ATA: Will Take a Non-Operating Charge Relating to Bond Exchange ---------------------------------------------------------------ATA Holdings Corp., parent Company of ATA Airlines, Inc. (Nasdaq: ATAH), announced a non-operating charge to earnings of approximately $27 million associated with its bond exchange in the first quarter of 2004. The charge relates specifically to the accounting for the cash consideration paid at closing of the exchange and the incremental notes issued during the exchange.

In announcing the charge, David Wing, Executive Vice President and Chief Financial Officer said, "The costs, economics and cash flows of the exchange transactions are unchanged and unaffected. Only the timing of when certain costs will be expensed is affected. Recognizing these charges this quarter instead of deferring them, of course, means future expenses will be less."

As previously announced, on January 30, 2004, ATA Holdings Corp. successfully completed offers to exchange newly issued Senior Notes due 2009 and cash consideration for its 10-1/2 percent Senior Notes due 2004 and newly issued Senior Notes due 2010 and cash consideration for its 9-5/8 percent Senior Notes due 2005. In completing the Exchange Offers, the Company accepted all Existing Notes tendered for exchange, issuing $163,064,000 in aggregate principal amount of 2009 Notes and delivering $15,885,476 in cash (which amount included accrued interest) in exchange for $155,310,000 in aggregate principal amount of 2004 Notes tendered and issuing $110,233,000 in aggregate principal amount of 2010 Notes and delivering $6,524,721 in cash (which amount included accrued interest) in exchange for $104,995,000 in aggregate principal amount of 2005 Notes tendered, pursuant to the terms of the Exchange Offers. In addition to the New Notes issued, $19,690,000 in aggregate principal amount of the 2004 Notes and $20,005,000 in aggregate principal amount of the 2005 Notes remain outstanding after the completion of the Exchange Offers.

The Company and its auditors, Ernst & Young, had initially determined the transaction should be accounted for as a "troubled debt restructuring." These determinations were based on conclusions of the Company and Ernst & Young that the restructuring resulted from financial difficulties experienced by the Company, and that bondholders had granted concessions to the Company in the exchange. These criteria are specified in Financial Accounting Standards Board (FASB) Emerging Issues Task Force Issue No. 02-4 "Determining Whether a Debtor's Modification or Exchange of Debt Instruments is Within the Scope of FASB Statement No. 15," which provides interpretive guidance on FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructurings" (FAS 15). Following FAS 15, the Company would have recorded the cash consideration paid at closing and the incremental notes issued at closing on the balance sheet as a bond discount to be amortized to expense ratably over the term of the New Notes.

The Company, with assistance of Ernst & Young, voluntarily sought, prior to the announcement of its first quarter results, confirmation of its planned accounting from the Securities and Exchange Commission (SEC). Last May 5, the SEC informed the Company that it interprets the accounting guidance differently, and concluded the transaction is not a "troubled debt restructuring." As a result of the SEC's determination, ATA Holdings Corp. will report a non-operating charge of approximately $27 million associated with the bond exchange, accounting for it as an extinguishment of debt.

About ATA Holdings

Now celebrating its 31st year of operation, ATA is the nation's10th largest passenger carrier (based on revenue passenger miles)and one of the largest low-fare carriers in the nation. ATA hasthe youngest, most fuel- efficient fleet among the major scheduledcarriers, featuring the new Boeing 737-800 and 757-300 aircraft.The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over40 business and vacation destinations. Stock of the parentcompany is traded on the Nasdaq Stock Exchange under the symbol"ATAH." To learn more about the company, visit the web site athttp://www.ata.com/

* * *

As reported in the Troubled Company Reporter's February 6, 2004edition, Standard & Poor's Ratings Services revised theimplications of its CreditWatch review on ATA Holdings Corp. andsubsidiary ATA Airlines Inc. to positive from developing. Thecorporate credit rating on both entities is 'CCC'. The ratingswere initially placed on CreditWatch March 18, 2003, andsubsequently lowered to current levels July 29, 2003.

At the same time, 'CC' ratings were assigned to ATA HoldingsCorp.'s $163.1 million 13% senior notes due 2009 and $110.2million of 12-1/8% senior notes due 2010, exchange offers foroutstanding notes. Standard & Poor's placed the ratings on thesenotes on CreditWatch with positive implications.

"The revised CreditWatch implication reflects the company'sJan. 30, 2004, completion of exchange offers for $260.3 million ofnotes due in 2004 and 2005," said Standard & Poor's credit analystBetsy Snyder. "The successful conclusion of the exchange offers,which were voluntary for bondholders, plus other actions to defernear-term cash obligations, should alleviate somewhat ATA'sliquidity problems," the analyst continued. ATA received theconsent of the Air Transportation Stabilization Board pursuant toits government-guaranteed loan. In addition, ATA completed arestructuring of various aircraft operating leases, with a portionof the payments rescheduled until later in the terms of theleases. Standard & Poor's will review the effect of the debtrestructuring on ATA's financial profile to resolve theCreditWatch.

BIOGAN INT'L: Turns to Zwaig Consulting for Financial Advice------------------------------------------------------------Biogan International, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for approval to employ Zwaig Consulting, Inc., as its financial advisor in its chapter 11 case.

Zwaig Consulting has been advising the Debtor since March 2004 with respect to the various restructuring and other strategic transactions potentially available to it. The firm has been particularly instrumental in assisting the company in preparing a liquidation analysis and comparing that analysis to the value stakeholders would receive in the proposed sale to HMZ Metals, Inc.

The Debtor expects Zwaig Consulting to:

a) review of annual and interim financial statements, projections and income tax returns for HMZ, its investee company, Biogan, Biogan International (BVI) Inc., GaoFeng Mining Company Limited, an investee company of Biogan BVI, and Guangxi Metals Co., Ltd., which is an equity investment of Biogan BVI;

b) review key operating agreements such as the Cooperative Joint Venture Contract for GGM and mining permits of GaoFeng;

c) appraise the capital assets of Biogan BVI including reserves;

d) compare various other financial and non-financial information as considered to be appropriate;

e) analyze publicly available information to the extent available and considered relevant; and

f) prepare other analyses as considered to be appropriate;

Zwaig Consulting's customary hourly rates for the persons most likely to be engaged in this matter are:

Headquartered in Toronto, Ontario, Canada, Biogan International, Inc., explores, selects, smelts and sells mineral products and by-products. The Company filed for chapter 11 protection on April 15, 2004 (Bankr. Del. Case No. 04-11156). Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $9,038,612 in total assets and $8,280,792 in total debts.

CALPINE CORP: First Quarter Net Loss Increases to $71.2 Million---------------------------------------------------------------Calpine Corporation (NYSE: CPN), one of North America's leading power companies, announced financial and operating results for the three months ended March 31, 2004.

For the three months ended March 31, 2004, the company reported a loss per share of $0.17, or $71.2 million of net loss, compared to a loss per share of $0.14, or $52.0 million of net loss for the quarter ended March 31, 2003. The results for the first quarter of 2004 include gains of approximately $0.06 per share from the sale of the Lost Pines 1 Power Project and $0.01 per share from foreign currency transactions. These gains were partially offset by losses of $0.03 per share from the expensing of deferred financing costs in connection with refinancing activities, and $0.01 per share due to amortization of the DIG Issue C20 mark-to-market gain recognized in the fourth quarter of 2003 as a cumulative effect of a change in accounting principle. Revenue for the quarter declined by 6% from the first quarter in 2003 due to netting approximately $370 million of sales of purchased power for hedging andoptimization with purchased power expense in the quarter ended March 31, 2004. This was due to the adoption on October 1, 2003, on a prospective basis, of new accounting rules related to presentation of non-trading derivative activity. Without this netting, revenue would have grown by approximately 11%.

"Calpine turned in another quarter of solid plant performance. Our clean, fuel-efficient power plants achieved a high average availability factor of 92% during the quarter. And, through productivity enhancements and economies of scale, Calpine continued to lower plant operating costs," stated Peter Cartwright, chief executive officer and president. "During the quarter, however, earnings were primarily impacted by low spark spreads brought about by mild weather in several major markets.

"On the refinancing front, Calpine completed its $2.4 billion Calpine Generating Company offering. With this transaction, Calpine has successfully refinanced and extended the debt maturities on $6.7 billion of debt. In addition, Calpine continued to strengthen its contractual portfolio through the execution of new long-term power sales agreements, and we are currentlyevaluating nearly 20,000 megawatts of additional contract opportunities.

"Competition continues to create opportunities for customers and the environment to benefit from modern, clean low-cost power resources. During the first quarter, we remained very active on the regulatory front. To build a robust competitive market, we must create fair, open and transparent markets. Calpine remains committed to the competitive power market and to creating long-term value for our customers and investors."

2004 First Quarter Results

Calpine recorded a net loss of $71.2 million for the first quarter of 2004, compared to a net loss of $52.0 million for the same period last year. During the three months ended March 31, 2004, gross profit decreased by $44.6 million, or 27%, to $120.5 million, compared to the first quarter last year. This decrease is the result of lower spark spreads realized during the quarter and additional costs associated with new power plants coming on line.For the first quarter of 2004, Calpine generated 21.1 million megawatt-hours, which equated to a capacity factor of 50.3% and realized an average spark spread of $21.05 per megawatt-hour. For the same period in 2003, Calpine generated 19.1 million megawatt-hours, which equated to a capacity factor of 55.2% and realized an average spark spread of $23.09 per megawatt-hour. Additional power plant costs include a $15.6 million increase in depreciationexpense, a $13.9 million increase in plant operating expense and a$7.6 million increase in transmission purchase expense. Also, in the first quarter of 2004, financial results were affected by a $96.2 million increase in interest expense and distributions on trust preferred securities due to higher debt balances, and by the expensing of deferred financing costs in connection with refinancings. We recorded $8.8 million of amortization expensein other cost of revenue in the first quarter of 2004 related to the DIG Issue C20 mark-to-market gain recognized in the fourth quarter of 2003.

2004 Earnings Guidance

The company is reaffirming its breakeven GAAP earnings guidance for the year ending Dec. 31, 2004. The company is also reaffirming that EBITDA, as adjusted, is anticipated to be approximately $1.7 billion for 2004.

About Calpine

Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook), celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to customers from clean, efficient, natural gas- fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world's largest producer of renewable geothermal energy, and owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. For more information about Calpine, visit http://www.calpine.com/

CANADA PAYPHONE: Says It'll Propose a Plan No Later than June 17----------------------------------------------------------------Subsequent to previous press releases announcing the decision to file a Notice of Intention to make a proposal for the benefit of its creditors under the Bankruptcy and Insolvency Act (Canada), the Company has requested for an extension of 45 days, which was granted by the registrar of the Superior court on May 5, 2004. The Company now plans to file its restructuring plan proposal no later than June 17, 2004 and a creditors meeting will be scheduled within 21 days of the filing of the proposal.

Canada Payphone Corporation is listed on the TSX Venture Exchange as CPY.

CAREMARK RX: Reports 40% Net Revenue Increase in First Quarter--------------------------------------------------------------Caremark Rx, Inc. (NYSE: CMX) reported diluted earnings per share of $0.29 for the first quarter of 2004. The financial results included integration and other related expenses of $10.4 million ($6.2 million net of taxes) related to the company's recently completed acquisition of AdvancePCS. Excluding these expenses, diluted earnings per share for the quarter were $0.32 representing an increase of 33% from the first quarter of 2003.

Caremark completed its acquisition of AdvancePCS on March 24, 2004. Therefore, the first quarter Caremark results include the results of AdvancePCS' operations from March 24 through March 31, 2004.

Based on the current results and the expectation of achieving previously forecasted synergies of $125 million by the end of 2004, one quarter earlier than expected, Caremark is raising full-year 2004 guidance for diluted earnings per share, excluding integration and other related expenses, to a range of $1.37 to $1.39. The company's previous guidance was in the range of $1.35 to $1.37 per share.

Operating Results of Legacy Caremark

Caremark's revenues during the first quarter of 2004, excluding the results of AdvancePCS from March 24 to March 31, 2004, increased 18% over the first quarter of 2003 to $2.6 billion. Caremark EBITDA during the quarter, excluding AdvancePCS, increased 31% to $165.1 million, excluding integration and other related expenses, producing an EBITDA margin of 6.4% compared with 5.8% for the same period in the prior year. Caremark diluted earnings per share, excluding AdvancePCS and integration and other related expenses were $0.32.

Consolidated Operating Results

During the first quarter of 2004, Caremark reported net revenues of $3.0 billion, a 40% increase over the first quarter of 2003. These revenues included $465.1 million of legacy AdvancePCS revenues during the quarter. Mail revenues were $1.4 billion, a 28% increase over the same period in the prior year. Mail prescriptions totaled 7.1 million during the first quarter, a growth rate of 20% over the first quarter of 2003. Retail revenues were $1.6 billion, an increase of 51% over the comparable period of 2003. Retail claims totaled 34.3 million during the first quarter, representing a 54% increase over the first quarter of 2003.

EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) for the first quarter of 2004, excluding integration and other related expenses, was $174.4 million, an increase of 38% over the first quarter of 2003. EBITDA included $9.3 million for AdvancePCS during the quarter. As a result of the strong performance, operating cash flow for the first quarter of 2004 was $203.0 million compared with $137.7 million in the same period last year, an increase of 47%. At March 31, 2004, net debt was $246.9 million reflecting the cash paid for AdvancePCS (net of cash acquired), the retirement of 98% of the outstanding AdvancePCS 8 1/2% Senior Notes and net reduction of debt under Caremark's credit facilities.

Capital expenditures totaled $12.9 million for the quarter, down from $18.1 million in the first quarter of 2003.

Operating Results of Legacy AdvancePCS

During the first quarter of 2004, legacy AdvancePCS recorded full quarter revenues, including retail copayments, of $5.1 billion, an increase of 10% over the first quarter of 2003. Legacy AdvancePCS EBITDA for the quarter was $96.4 million, excluding $2.6 million of integration expenses, a decrease of $2.1 million compared with the first quarter of 2003. In management's opinion, this is not indicative of the ongoing EBITDA run rate for legacy AdvancePCS. Legacy AdvancePCS EBITDA was adversely impacted by adjustments recognized in the quarter for revisions to estimated net realizable values for receivables, settlements of amounts due to and due from customers and payroll taxes on stock options exercised shortly before the close of the acquisition. EBITDA was positively impacted by adjustments to certain liabilities and inventory investment buys that were higher than normal. The total of the above items reduced legacy AdvancePCS EBITDA by approximately $19 million for the first quarter. The company does not expect similar adjustments of this magnitude to recur in future statements of operations.

Outlook and Acquisition Integration

Caremark's integration planning efforts that began in November 2003 are now being executed. "Throughout the integration process, our primary focus has been, and will continue to be, to benefit our customers and their plan participants with no disruptions and improved services," said Mac Crawford, Chairman, President and Chief Executive Officer of Caremark. "We are also very pleased with the outlook for synergies with the AdvancePCS transaction."

Based on current projections, Caremark expects 2004 consolidated net revenue to total $25 to $26 billion. Quarterly diluted earnings per share for 2004 before integration and other related expenses are expected to be $0.29 to $0.30 in the second quarter, $0.34 to $0.35 in the third quarter and $0.41 to $0.42 in the fourth quarter. Therefore, diluted earnings per share excluding integration and other related expenses for the full-year are expected to be in the range of $1.37 to $1.39. Caremark's 2004 earnings expectations are based, in part, on the following assumptions:

-- The company now expects to achieve the previously estimated $125 million in pre-tax synergies in the remaining three quarters of 2004, one quarter earlier than originally projected.

-- Stock option expense associated with stock options granted to AdvancePCS employees prior to the acquisition is expected to total approximately $23 million in 2004, or approximately $9 million, $7 million and $6 million in the last three quarters of the year, respectively.

-- Amortization expense related to identifiable intangible assets acquired in the transaction is currently estimated to total approximately $38 million in 2004, or approximately $12.5 million per remaining quarter in 2004. The company expects the valuation of the identifiable intangible assets associated with the transaction and the estimate of 2004 amortization expense to be completed by the end of the second quarter.

-- Depreciation expense is expected to total approximately $25 to $26 million per remaining quarter in 2004.

-- Net interest expense is expected to total $35 to $40 million in 2004.

-- The company's effective accounting tax rate is expected to decrease slightly beginning in the second quarter to 39.8%. However, the cash tax rate will continue to be significantly lower until all of the company's tax net operating loss carryforwards are fully utilized.

In addition, Caremark's guidance includes implementation costs associated with the Federal Employee Program that selected Caremark to administer its mail service benefit. While this contract begins January 1, 2005, Caremark will incur incremental expenses related to this contract during 2004. These incremental costs are expected to have a negative impact on 2004 earnings of approximately $0.02 per diluted share and are expected to be incurred during the third and fourth quarters.

The company also will be required to expense certain ongoing integration costs as they are incurred. Since the acquisition of AdvancePCS closed on March 24, 2004, and the integration is in process, these expenses have not yet been quantified and therefore are not included in the company's earnings per share expectations given above.

"The synergies we expect to achieve in 2004 from the acquisition make us comfortable raising our previously established guidance for diluted earnings per share for 2004 to the range of $1.37 to $1.39, excluding the impact of integration and other related expenses," said Mr. Crawford.

"Also, we now believe that the synergies ultimately to be realized in the transaction will total approximately $250 million annually which will be achieved over the next several years," said Crawford. "With the first quarter off to a strong start and increased earnings expected for the remainder of 2004, Caremark is delivering strong value for our shareholders as we remain focused on continuing to be the premier health management solutions provider."

About Caremark Rx, Inc.

Caremark Rx, Inc. is a leading pharmaceutical services company, providing through its affiliates comprehensive drug benefit services to over 2,000 health plan sponsors and their plan participants throughout the U.S. Caremark's clients include corporate health plans, managed care organizations, insurance companies, unions, government agencies and other funded benefit plans. The company operates a national retail pharmacy network with over 55,000 participating pharmacies, seven mail service pharmacies, the industry's only FDA-regulated repackaging plant and 23 specialty pharmacies for delivery of advanced medications to individuals with chronic or genetic diseases and disorders.

As reported in the Troubled Company Reporter's February 16, 2004 edition, Standard & Poor's Ratings Services said that its ratings on Nashville, Tennessee-based pharmacy benefit manager Caremark Rx.Inc. remained on CreditWatch with positive implications. These include the company's 'BBB-' long-term corporate credit and senior secured debt ratings as well as the 'BB+' rating on its $450 million in 7.375% senior secured notes. The ratings were originally placed on CreditWatch on Sept. 3, 2003, following the company's announcement that it intended to acquire its rival, AdvancePCS, in a $6 billion transaction funded mostly by stock.

AdvancePCS' ratings also remain on CreditWatch with positive implications, including its 'BB+' corporate credit and senior secured debt ratings as well as its 'BB' senior unsecured debt ratings.

COMDIAL CORPORATION: Majority Stockholders Back Refinancing Deals-----------------------------------------------------------------An Information Statement has been mailed on, or about, April 2, 2004 to the stockholders of record of Comdial Corporation at the close of business on March 3, 2004.

The Information Statement was provided to inform of the adoption of resolutions by written consent of the holders of a majority of the outstanding shares of the Company's voting common stock, par value $.01 per share.

The resolutions adopted by the Majority Stockholders approve of the private placement bridge financing transaction that was initially entered into by the Company on February 17, 2004 and that was subsequently amended to expand the offering based on greater than expected interest on the part of investors.

Further, the Majority Stockholders also approved agreements entered into between the Company and the holders of certain senior subordinated secured convertible promissory notes issued in connection with a private placement that occurred in 2002, which agreements extend the maturity date of the Senior Notes and enable the conversion of the Senior Notes at the option of the holders into common stock at a price that may be less than the then-current market value of the stock.

Stockholder approval was required because the expansion of the bridge financing transaction and the amendment to the Senior Notes would each result in the issuance of securities convertible into common stock in excess of 20% of the total outstanding common stock of the Company at a price that may be less than the greater of book or market value of the common stock. The Nasdaq Marketplace Rules require the approval of a majority of the holders of the issued and outstanding common stock prior to the sale or issuance of securities convertible into common stock equal to 20% or more of a company's then-outstanding shares at a price less than the greater of book or market value. Although the Company is not currently listed on the Nasdaq National Market or the Nasdaq SmallCap Market exchanges (and is therefore not subject to Nasdaq's listing requirements), the Company agreed to comply with the Nasdaq Marketplace Rules in the Bridge Financing and the Senior Notes Amendment.

The Board of Directors of the Company previously authorized the Company to enter into a private placement bridge financing transaction including investments of up to $4 million and an over-allotment of $2 million. The Board also approved the subsequent expansion of the transaction as described above. Pursuant to such approval, the Company has obtained a total of $9 million in investment proceeds in exchange for 8% subordinated convertible promissory notes and warrants to acquire up to 1.8 million shares of common stock. The Bridge Notes and the Bridge Warrants, collectively, could result in the issuance of up to 4,462,722 shares of common stock. Pursuant to the amendment to the Senior Notes, the Senior Notes could be converted into a maximum of 3,939,882 shares. None of the foregoing securities may be converted into common stock in accordance with the Stockholder Resolutions until the date that is at least 20 days after the date the Information Statement was first mailed to stockholdersof record, in accordance with Regulation 14C of the Securities Exchange Act of 1934.

As of the close of business on the Record Date, Comdial had an aggregate of 8,974,338 shares of common stock outstanding and no shares of Preferred Stock outstanding. Each outstanding share of common stock is entitled to one vote per share. The affirmative consent of the holders of a majority of the issued and outstanding shares of the Company's common stock was necessary to approve the Stockholder Resolutions in the absence of a meeting of stockholders. The Majority Stockholders own approximately 66% of the outstanding shares of the company's common stock. The requisite stockholder approvals of the Stockholder Resolutions was obtained on February 26, 2004 by the execution of the Majority Stockholders' written consents in favor thereof.

About Comdial

Comdial -- whose December 31, 2003 balance sheet shows a stockholders' equity deficit of $5,399,000 -- is a converged voice and data communications solutions provider with over 25 years of long-standing success as a leading brand. Focused on superior customer service and reliable communications solutions, we are dedicated to producing best-in-class small- to mid-sized enterprise communications products. Through innovative technology and flexibility, we are unmatched at providing comprehensive Internet Protocol (IP) communications solutions tailored to meet each customer's evolving business needs. For more information about Comdial and its communications solutions, visit its web site at http://www.comdial.com/

Revenues for the current quarter totaled $2.7 million as compared with $13.1 million for the corresponding quarter in 2003 and $9.1 million for the quarter ended December 31, 2003.

The net loss on a GAAP basis for the current quarter was $8.4 million, or $0.28 per share, as compared to a net loss of $29.3 million, or $1.00 per share, for the corresponding quarter ended March 31, 2003, and $2.9 million, or $0.09 per share, for the quarter ended December 31, 2003.

As of March 31, 2004, total cash and cash equivalents were $10 million of which approximately $1.2 million was encumbered.

At March 31, 2004, Commerce One, Inc. records total stockholders' deficit of $5,540,000 compared to a deficit of $3,028,000 at December 31, 2003.

Quarterly Highlights

The following milestones were completed or announced during the first quarter of 2004:

-- The Company previously announced that it was considering the sale of its Supplier Relationship Management (SRM) applications assets. The Company today announced that it is no longer actively pursuing the sale of these applications. The Company believes that there are promising synergies between the SRM applications and the Conductor technology, including the ability to enable customers to create composite SRM applications. The Company plans to focus its sales efforts on both Conductor and SRM opportunities. Mark Pecoraro, General Manager and Senior Vice President, SRM Division, will lead the Company's SRM sales and development opportunities. Mark Pecoraro brings more than 17 years of leadership experience in enterprise applications, infrastructure software, technical services and global business operations.

-- The Company added two seasoned industry veterans to the executive team to focus on growing revenue opportunities for the Conductor platform and leveraging the assets and domain expertise of the SRM business.

Wain Beard, senior vice president of worldwide sales, brings more than 25 years experience in the technology field. His responsibilities include sales, professional services, and channel teams.

-- The Company also announced that, during the second quarter, Ruesch, a leading financial institution specializing in international B2B payment solutions, purchased Commerce One Conductor to help automate several business processes. Also during the second quarter, the Company established a relationship with GridNode who will act as a partner to provide Conductor as a gateway to customers who work with the RosettaNet standard in the high tech industry.

-- During the fourth quarter of 2003, the Company executed an agreement with ComVest for $5.0 million in financing which was received in full on or before January 2, 2004.

"We feel optimistic about our prospects going forward. We believe that retaining the SRM business will create value for the company and for its customers and believe that there is promising synergy between the SRM applications and the Conductor platform," said Commerce One Chairman and CEO Mark Hoffman. "We made key additions to our executive team and have begun to expand our sales and marketing teams to help take advantage of the opportunities we are seeing for both Conductor and SRM."

About Commerce One

From its initial roots in Internet-based software applications, Commerce One has consistently been at the forefront of delivering advanced technologies that help global businesses collaborate with their partners, customers and suppliers over the Internet. Commerce One has defined many of the open standards and protocols established for business networks today and our global customer base includes leaders in a wide range of industries. The Commerce One Conductor platform and industry-specific Process Accelerators represent the next generation of business process management solutions that enable enterprises to optimize their existing technology investments and enhance functionality of existing applications and processes. For more information, go to http://www.commerceone.com/

CONSECO: Low-Rated Reorganized Company Reports 1st Quarter Results------------------------------------------------------------------Conseco, Inc. (NYSE:CNO) reported financial results for the quarter ended March 31, 2004. The company emerged from Chapter 11 bankruptcy on September 10, 2003. Results for periods following our emergence from Chapter 11 reflect fresh-start accounting adjustments as required by generally accepted accounting principles ("GAAP"). Accordingly, our financial results for periods following our emergence from bankruptcy are not comparable to our results prior to emergence. Activity of the company for periods after September 1, 2003 is included in the post-bankruptcy or "successor company" financial statements. Activity of the company for periods prior to September 1, 2003 is included in the pre-bankruptcy or "predecessor company" financial statements.

Operating results

For the quarter ended March 31, 2004 Conseco reported net income (after dividends on convertible exchangeable preferred stock) of $49.9 million, or 50 cents per diluted common share. Results for the quarter included net after-tax gains of $12.9 million from realized investment gains.

As previously reported, the predecessor company reported a net loss for the quarter ended March 31, 2003 of $19.0 million.

Earnings in our Bankers Life and Conseco Insurance Group segments were below our original expectations due, in part, to decreases in net investment income. Although the book value of our total investments increased, net investment income decreased by approximately $9.0 million between the fourth quarter of 2003 and the first quarter of 2004 primarily due to prevailing market rates of interest and prepayments in our mortgage-backed securities portfolio. First quarter net investment income was reduced by approximately $6.2 million of premium amortization associated with prepayments on fixed maturity investments (primarily mortgage-backed securities), which had been marked to market, as required by "fresh start" accounting, at prices above par. Investment purchases during the first quarter were at average yields of 5.05%. The average portfolio yield on our fixed maturity portfolio was 5.55% at December 31, 2003 and 5.53% at March 31, 2004.

Pre-tax results in our Conseco Insurance Group segment included adverse life mortality experience of approximately $4.4 million from higher than expected death claims.

Pre-tax results in our Corporate Operations segment included severance expense of $4.4 million and a credit agreement charge of $2.0 million.

Earnings Guidance and Outlook

Conseco reaffirmed guidance at the low end of its previously reported range of $175 million to $200 million of expected net income applicable to common stock for the 12 months beginning October 1, 2003. Our earnings guidance is based on numerous assumptions and factors. If they prove incorrect, our actual earnings could differ materially from our estimates. Our guidance excludes any impact from realized investment gains (losses) and the proposed refinancing of our current capital structure described in our Form S-1 Registration Statement initially filed on January 29, 2004.

Comments from CEO Bill Shea

"In spite of the pressure on our first quarter operating results from the lower interest rate environment and unfavorable mortality, we were generally pleased with our other key operating metrics. We are continuing to focus on the business fundamentals that will drive our long-term value as an enterprise -- cash flow, statutory capital, asset quality and operational excellence. It is no coincidence that these fundamentals are also the key to our primary short-term goal, which is to achieve higher ratings for our insurance companies. Once again this quarter, we made more progress on the following statutory-basis measures:

-- Combined statutory earnings (before realized investment gains and before interest expense paid to the parent company on surplus notes) (a non-GAAP measure) were an estimated $54.8 million in 1Q04, up 12 percent over 1Q03.

-- Combined Company Action Level risk-based capital (RBC) ratio (a non-GAAP measure) was an estimated 297% at March 31, 2004, up from 287% at year-end 2003, and 166% at March 31, 2003.

"Our new annualized premium sales of supplemental health and life products for the first quarter were generally in line with our operating plan and totaled approximately $52 million at Bankers Life and $20 million at Conseco Insurance Group. First-year annuity deposits for the quarter were $176 million and $6 million at Bankers Life and Conseco Insurance Group, respectively.

"Our other major goals for 2004 continue to be:

-- Expanding our career agent segment (Bankers Life) into new geographic markets. During the first quarter 2004, Bankers added six branches to its network and is on track to meet its goal of approximately 170 branches nationwide by year- end 2004.

-- Further reducing operating expenses and improving the efficiency of our operations across all business functions. Operating expenses for the quarter were in line with our plan and we believe we are still on track to meet our 2004 goal of at least a $20 million reduction in our core operating expense levels.

-- Continuing our focus on the acquired blocks of long-term care business in the Other Business in Run-off segment. This business performed within our expectations for the quarter, thanks to the work of the team we have dedicated to managing its runoff. Also, we believe that the recently announced order from the Florida Insurance Department protects the policyholders of our Conseco Senior Health subsidiary while providing the subsidiary with the ability to mitigate its losses and enhance its ability to pay future claims.

"We are also announcing that the expected grant described in our prospectus of approximately 3 million options to our officers will have an exercise price equal to the higher of $21.00 per share or the fair market value on the date of the grant.

"We've come a long way since our emergence from Chapter 11 less than eight months ago. Our roadmap is clear. Our goal is to become a premier insurance company serving middle-income Americans throughout their working careers and retirement. We believe we can achieve that goal by capitalizing on what we believe to be our key advantages:

-- A valuable franchise uniquely focused on the growing senior and middle-income markets

-- A diverse and relevant product portfolio

-- A diverse distribution network

-- A strong balance sheet

"As managers and associates, we recognize that we have an opportunity to recreate a viable and valuable company with which all of us can be proud to be associated. Execution is the key, and we plan on getting it done."

About Conseco

Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial future. For more information, visit Conseco's web site at http://www.conseco.com/

"The CreditWatch reflects the expected issuance by Conseco Inc. of $1 billion of new common equity by early May 2004," said Standard & Poor's credit analyst Jon Reichert. Not affected by this CreditWatch action are the ratings on Conseco Senior Health Insurance Co., which remain on CreditWatch negative where they were placed Nov. 19, 2003.

"Proceeds from the common equity issuance, in conjunction with proceeds from an expected $500 million issuance of mandatory convertible preferred stock and $900 million of new bank debt, are expected to be used to refinance the existing $1.3 billion of outstanding bank debt, redeem the outstanding $900 million of convertible exchangeable preferred stock, and make a capital contribution to the insurance subsidiaries," Mr. Reichert added. "Because of this recapitalization, Conseco Inc. is expected to have a capital structure with less onerous debt service payments than currently exists, allowing for greater fixed-charge coverage that should be supportive of higher ratings at the holding company as well as at the insurance subsidiaries." If the ratings are upgraded, it is expected that the senior debt rating on Conseco Inc. will go no higher than 'BB-', the preferred stock rating will go no higher than 'B-', and the financial strength will go no higher than 'BB+'.

CRESECENT REAL: Posts $18.6 Million Net Loss for First Quarter--------------------------------------------------------------Crescent Real Estate Equities Company (NYSE:CEI) announced results for the first quarter 2004.

Funds from operations before impairment charges related to real estate assets - diluted ("FFO") for the three months ended March 31, 2004 was $27.5 million, or $.23 per share and equivalent unit. These compare to FFO of $41.4 million or $.35 per share and equivalent unit, for the three months ended March 31, 2003. Funds from operations is a supplemental non-GAAP financial measurement used in the real estate industry to measure and compare the operating performance of real estate companies, although these companies may calculate funds from operations in different ways. Crescent reports FFO before taking into account impairment charges required by GAAP which are related to its real estate assets. A reconciliation of Crescent's FFO before and after such impairments to GAAP net income is included in the Company's financial statements accompanying this press release and in the First Quarter 2004 Supplemental Operating and Financial Data located on the Company's website.

Net loss available to common shareholders for the three months ended March 31, 2004 was ($18.6) million, or ($.19) per share (diluted). This compares to a net loss of ($19.3) million, or ($.19) per share (diluted), for the three months ended March 31, 2003.

According to John C. Goff, Vice Chairman and Chief Executive Officer, "Our first quarter FFO of $.23 per share was above our expectations of $.20 to $.22 per share due primarily to timing of residential activity. We continue to see 2004 as a year of stabilization during which we are positioning our office portfolio for improving market fundamentals. While job growth numbers are making better headlines these days for the nation as well as in our markets, we believe it will take several quarters for this trend to have a meaningful impact on office demand."

On April 16, 2004, Crescent announced that its Board of Trust Managers had declared cash dividends of $.375 per share for Common, $.421875 per share for Series A Convertible Preferred, and $.59375 per share for Series B Redeemable Preferred. The dividends are payable May 14, 2004, to shareholders of record on April 30, 2004.

Business Sector Review

Office Sector (66% of Gross Book Value of Real Estate Assets as of March 31, 2004)

Operating Results

Office property same-store net operating income ("NOI") declined 3.6% for the three months ended March 31, 2004 from the same period in 2003 for the 26.1 million square feet of office property space owned during both periods, excluding properties held for sale. Average occupancy for these same-store properties for the three months ended March 31, 2004 was 85.8% compared to 86.0% for the same period in 2003. Crescent's overall office portfolio, excluding properties held for sale, was 88.0% leased and 86.4% occupied as of March 31, 2004. During the three months ended March 31, 2004 and 2003, Crescent received $1.3 million and $2.0 million, respectively, of lease termination fees. Crescent's policy is to exclude lease termination fees from its same-store NOI calculation.

The Company leased 1.3 million net rentable square feet during the three months ended March 31, 2004, of which 657,000 square feet were renewed or re-leased. The weighted average full service rental rate (which includes expense reimbursements) decreased 16.2% from the expiring rates for the leases of the renewed or re-leased space. All of these leases have commenced or will commence within the next twelve months. Tenant improvements related to these leases were $1.69 per square foot per year and leasing costs were $0.88 per square foot per year.

Denny Alberts, President and Chief Operating Officer, commented, "As expected, our total office occupancy, excluding properties held for sale, has remained relatively constant, improving slightly from 86.1% at the end of last year to 86.4% at the end of the first quarter of this year. The decline in the weighted average full-service rental rate that we saw this quarter was largely driven by two renewals in the Austin and Denver markets. If we exclude these leases, the overall weighted average full service rental rate decline for renewed and re-leased leases would have been in line with the 10% decline in 2003.

"As of the beginning of 2004, we had 5.4 million gross square feet of leases scheduled to expire. To date, 82% of that expiring space has been addressed - 74% by signed leases and 8% by leases in negotiation. For the signed leases that are scheduled to commence during the remainder of this year, we are expecting a 3% to 5% decline in the weighted average full service rental rate."

Acquisitions

During the first quarter, Crescent completed the intended acquisition of the Hughes Center office portfolio in Las Vegas, acquiring the five remaining office properties and seven leased retail parcels. With these acquisitions, the Company has acquired seven office properties totaling 1.0 million square feet and nine leased retail parcels for a gross purchase price of $214 million, $119 million of which was paid in cash and $95 million in net assumed debt. On March 1, 2004, Crescent also acquired two undeveloped land parcels within the Hughes Center for $10 million, of which approximately $2 million was paid in cash and approximately $8 million was financed.

On March 31, 2004, Crescent entered the Orange County, California office market by acquiring Dupont Centre, a 250,000 square-foot Class A office property located in the John Wayne Airport submarket, for approximately $54 million.

Dispositions

On April 13, 2004, Crescent sold Liberty Plaza, a 219,000-square-foot Class A office property located in North Dallas. The sale generated net proceeds to Crescent of approximately $11 million which were used to pay down the Company's revolving credit facility.

On March 23, 2004, Crescent sold 1800 West Loop South, a 400,000-square-foot Class A office property located in the West Loop/Galleria submarket in Houston. The sale generated net proceeds of approximately $28 million to Crescent, which were used to pay down the Company's revolving credit facility.

Resort and Residential Development Sector (23% of Gross Book Value of Real Estate Assets as of March 31, 2004)

Destination Resort Properties

Same-store NOI for Crescent's five resort properties declined 4% for the three months ended March 31, 2004 from the same period in 2003. The average daily rate increased 4% and revenue per available room remained flat for the three months ended March 31, 2004 compared to the same period in 2003. Weighted average occupancy was 69% for the three months ended March 31, 2004 compared to 71% for the three months ended March 31, 2003.

On April 21, 2004, Crescent entered into agreements with the Ritz-Carlton Hotel Company, L.L.C. to develop the first Ritz-Carlton hotel and condominium project in Texas, with development to commence upon reaching an acceptable level of pre-sales for the residences. The site for the project is a 3.4-acre Crescent-owned land parcel located adjacent to The Crescentr office, retail and hotel complex in Dallas. The proposed 21-story Ritz-Carlton, Dallas, would include approximately 216 hotel rooms and 70 residences. Ground breaking is currently targeted for the first quarter of 2005. Consistent with its other development projects, Crescent will consider bringing in a joint-venture partner.

Upscale Residential Development Properties

Crescent's overall residential investment generated $6.2 million in FFO for the three months ended March 31, 2004. This compares to $5.3 million in FFO generated for the three months ended March 31, 2003.

Investment Sector (11% of Gross Book Value of Real Estate Assets as of March 31, 2004)

Business-Class Hotel Properties

Same-store NOI for Crescent's four business-class hotel properties decreased 26% for the three months ended March 31, 2004 from the same period in 2003. The average daily rate decreased 1% and revenue per available room decreased 13% for the three months ended March 31, 2004 compared to the same period in 2003. Weighted average occupancy was 67% for the three months ended March 31, 2004 compared to 75% for the three months ended March 31, 2003. The decline in NOI is primarily due to changes in convention business patterns, which resulted in lower revenues to offset fixed expenses.

Temperature-Controlled Properties Investment

Crescent's investment in temperature-controlled properties generated $4.9 million in FFO for the three months ended March 31, 2004. This compares to $7.0 million of FFO generated for the three months ended March 31, 2003. The decline in FFO is primarily due to an increase in interest expense associated with the Morgan Stanley financing completed in February 2004 and a decrease in rental payments received impacted by tenant start-up costs associated with preparing warehouses for new customer business.

Balance Sheet Review

Equity Issuance

On January 15, 2004, Crescent issued 3.4 million additional shares of its 6.75% Series A convertible cumulative preferred shares in a public offering. The shares were issued at $21.98 per share, resulting in a current yield of 7.68%, excluding dividends accrued on the shares up to the issuance date. Net proceeds to Crescent totaled $71 million.

Financing

On February 5, 2004, Crescent and Vornado Realty Trust announced that AmeriCold Realty Corporation, the entity through which Crescent and Vornado hold their 40% and 60% interests, respectively, in the temperature-controlled properties, completed a $254 million mortgage financing with Morgan Stanley Mortgage Capital Inc. that is secured by 21 of its owned and 7 of its leased temperature-controlled properties. The five-year loan bears interest at LIBOR plus 295 (with a LIBOR floor of 1.5% with respect to $54 million of the loan) and requires principal payments of $5 million annually. As a result of the financing, Crescent received a $90 million distribution from the partnership.

Earnings Outlook

Crescent addresses earnings guidance in its earnings conference calls and provides documentation of its quarterly supplemental operating and financial data reports. Refer to the following paragraphs for details about accessing today's conference call, presentation, and supplemental operating and financial data report.

Changes In Statistical Reporting Methods

Beginning in the first quarter of 2004, the Company implemented two changes in office segment statistical reporting methods. First, to more appropriately reflect occupancy trends in continuing operations, the Company now excludes properties held for sale from occupancy and same-store statistics as noted. In addition, the Company's same-store statistics now include 100% of operations for all consolidated and unconsolidated joint-venture properties, rather than its prorata share of joint-venture properties as in previous disclosures.

Supplemental Operating And Financial Data

Crescent's first quarter supplemental operating and financial data report is available on the Company's website (www.crescent.com) in the investor relations section. To request a hard copy, please call the Company's investor relations department at (817) 321-2180.

About The Company

Crescent Real Estate Equities Company (NYSE:CEI) is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of more than 75 premier office properties totaling more than 30 million square feet, located primarily in the Southwestern United States, with major concentrations in Dallas, Houston, Austin, Denver, Miami and Las Vegas. In addition, the Company has investments in world-class resorts and spas and upscale residential developments.

ECLIPSE PROPERTIES: Signs-Up Everett Gaskins as Attorneys---------------------------------------------------------Eclipse Properties, LLC asks for permission from the U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, to employ Everett, Gaskins, Hancock & Stevens, LLP as its attorney in its chapter 11 proceeding.

William P. Janvier, Esq., will be the principal attorney to represent the Debtor. The Debtor expects Everett Gaskins to:

b) perform all necessary legal services in connection with the Debtor's reorganization, including Court appearances, research, opinions and consultations on reorganization options, directions and strategy; and

c) perform all other legal services for the Debtor which may be necessary in its chapter 11 case.

Mr. Janvier will be paid in his current hourly rate of $240 per hour.

Headquartered in Raleigh, North Carolina, Eclipse Properties, LLC filed for chapter 11 protection on April 14, 2004 (Bankr. E.D. N.C. Case No. 04-01415). William P. Janvier, Esq., at Everett Gaskins Hancock & Stevens represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $10,750,000 in total assets and $8,437,447 in total debts.

ENERGY CORP: S&P Withdraws Junk Corporate & Sub. Debt Ratings -------------------------------------------------------------Standard & Poor's Ratings Services withdrew its ratings on independent oil and gas exploration and production company Energy Corp. of America. In addition, the ratings on the company's senior subordinated notes due 2007 were also withdrawn. Standard & Poor's most recent corporate credit and subordinate ratings were 'CC' and 'C', respectively, reflecting the ratings downgrade on Jan.28, 2004. The ratings before withdrawal reflected the company's announcement that it was in default under the indenture for its senior subordinated notes as an indirect adverse legal judgment.

ENRON CORP: Asks Court to Extend Removal Period Until Sept. 6-------------------------------------------------------------The Enron Corporation Debtors ask the Court, pursuant to Section 105(a) of the Bankruptcy Code and Rule 9006(b) of the Federal Rules of Bankruptcy Procedure, to extend the Removal Period for the First Debtors to September 6, 2004 and for each Subsequent Debtor to an additional 90 days from its deadline.

Since the Petition date, the Debtors and their personnel and professionals have been working diligently to administer these Chapter 11 cases and to address a vast number of administrative and business issues while, at the same time, operating their business to maximize asset values and arranging for the sale of certain of the Debtors' assets. As a result, the Debtors have not completed their evaluation of the merits of removing certain actions and require additional time to do so.

Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that the right to remove civil actions is a valuable right that the Debtors do not want to lose inadvertently.

Ms. Gray explains that the size and complexity of the Debtors' businesses, the Debtors' employee relationships, corporate structure and financial arrangement place heavy demands on the Debtors' management and personnel in an ideal environment. The Chapter 11 cases have exacerbated these demands, complicating operational issues and adding a layer of complexity by reason of the Chapter 11 matters. The Debtors are in the process of finalizing their review of all of their records to determine whether they need or should remove any claims or civil causes of action pending in other courts. (Enron Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., 215/945-7000)

ELECTROPURE INC: Auditors Express Doubt in Going Concern Ability----------------------------------------------------------------At January 31, 2004, ElectroPure Inc. had a working capital deficit of $2,221,041. This represents a working capital decrease of $287,608 compared to that reported at October 31, 2003. The primary component of the decrease is a $400,000 increase in current notes payable, offset by a reduction in accounts payable and an increase in accounts receivables.

The Company's primary source of working capital has been from short-term loans. Between November 2003 and December 2003, the Company borrowed a total of $300,000 from Mr. Anthony Frank, a major shareholder, at an 8% annual interest rate. On January 20, 2004, the Company borrowed $100,000 from an unaffiliated lender at an annual interest rate of 15%.

In the opinion of management, available funds, funds anticipated to be realized on the sale of securities to, or short term loans from, its major shareholder, refinancing of the Company's building, and proceeds to be realized from the sale of EDI products currently on order, are expected to satisfy ElectroPure's working capital requirements through August 2004. Its independent auditors have included an explanatory paragraph in their report on the financial statements for the year ended October 31, 2003 which raises substantial doubt about ElectroPure's ability to continue as a going concern.

The Company is in the process of refinancing the mortgage on its Laguna Hills facility with a commercial mortgage lender in order to utilize a portion of the equity in the building as working capital. In addition, the Company is negotiating with a second lender for up to $400,000 in loan proceeds to be secured by a second deed of trust on the building. No assurances can be given that either such financings will be concluded on terms acceptable to the Company, or at all.

Net loss to common shareholders for the first quarter 2004 was $4.1 million, or $0.10 per diluted share, compared to a net loss of $1.7 million, or $0.04 per diluted share, in the first quarter 2003. The Company reported a net loss from continuing operations for the first quarter 2004 of $1.8 million, as compared to a net loss from continuing operations of $1.4 million in the prior year quarter. Net loss to common shareholders and net loss from continuing operations in the first quarter 2003 included a $2.3 million deferred income tax benefit. At year end 2003, the Company discontinued recording a deferred income tax benefit.

Financial Highlights for the First Quarter 2004

Adjusted funds from operations (AFFO) for the first quarter 2004 increased 18% to $5.6 million, or $0.13 per diluted share, versus AFFO of $4.6 million, or $0.11 per diluted share, for the first quarter 2003. Equity Inns' first quarter AFFO increase stems primarily from hotel revenue increases and hotel operating profit increases compared to the prior-year period. There are no differences between AFFO and FFO for the first quarter 2004. Adjusted EBITDA was $14.6 million in the first quarter 2004 versus $14.1 million in the same period last year.

First quarter 2004 hotel room revenue was $51.9 million, an increase of 4.4% from $49.7 million in the first quarter 2003. The improvement was principally driven by a hotel portfolio revenue per available room (RevPAR) increase of 2.4%. The Company also benefited from approximately $500,000 in additional revenue due to the leap year effect, as well as approximately $635,000 in incremental revenue through the completion of two acquisitions in the first quarter 2004. The revenue improvement primarily resulted from a 60 basis point gain in the Company's occupancy rate to 63.2%, and the average daily rate (ADR) growing 1.5% to $77.89, compared to $76.73 in the first quarter 2003. Equity Inns' RevPAR improved throughout the quarter. RevPAR declined 0.2% from a year ago in January, before climbing 0.5% and 6.2% in February and March, respectively, compared to the same periods a year-ago.

Phillip H. McNeill, Sr., Chief Executive Officer, stated, "We are pleased to have delivered solid first quarter results that exceeded our own expectations. During the industry slowdown the past three years, we sought to strategically increase occupancy share in our individual hotel markets while maintaining our RevPAR premiums. We believed that by concentrating on occupancy, we could minimize our downside during challenging economic times, while positioning our hotels to grow ADR as the economy recovers. We were gratified to see that with improved industry conditions in the first quarter, we were able to not only increase RevPAR, occupancy and ADR, but also raise ADR to a level higher than the first quarter 2000, which was an industry peak prior to the latest industry downturn."

Mr. McNeill added, "Most of our brands delivered flat to increased RevPAR trends in the first quarter. Our Marriott Courtyards increased RevPAR by 11.1%, while our Homewood Suites, Holiday Inns and Comfort Inns all had RevPAR growth in excess of 6% for the quarter over the first quarter 2003. Furthermore, Equity Inns' AmeriSuites increased its ADR 3.3% but resulted in a RevPAR decline of less than 1%. The ADR improvement was driven primarily by the brand's ongoing effort to capture new leisure business through both an intensified sales effort and selective selling via discounted Internet channels. According to Smith Travel Research, we achieved a 14% RevPAR premium over our competitors year-to-date."

While Equity Inns' positive RevPAR performance for the quarter was the primary driver of its AFFO results, it was offset by a $1.1 million increase in the Company's hotel operating expenses. The increase in quarterly operating expenses stemmed primarily from approximately $590,000 in payroll and related benefits, $285,000 in incremental expenses related to new acquisitions, $200,000 in related franchise fees and $150,000 in utility costs, which were partially offset by an approximately $300,000 reduction in insurance premiums and real estate taxes.

As compared to the same quarter of the prior year, total hotel revenue increased $2.3 million and the gross operating margin increased 20 basis points to 37.2% versus 37.0%. GOP margin is defined as hotel revenues minus hotel operating costs, before property taxes, insurance and management fees, divided by hotel revenues.

Howard A. Silver, President and Chief Operating Officer, stated, "We are pleased that Equity Inns' focus on driving hotel performance and controlling our expenses enabled us to improve our sales and GOP margin in the first quarter. While Smith Travel Research first quarter data shows that the overall industry experienced higher increases in RevPAR (+7.7%) than Equity Inns, this was expected, as our diverse hotel portfolio enabled us to outperform the industry through the latest downturn. Thus, the industry is up against easier comparisons than Equity Inns for this year. This does not, however, suggest that we are complacent with our results. We will continue to pursue strategic acquisitions that update our portfolio with quality assets. In addition, we will focus on driving hotel performance, while continuing to bear down on costs to further enhance our margins."

Capital Structure

On March 31, 2004, Equity Inns had $347.8 million of long-term debt outstanding, which included $69.5 million drawn under its $110 million line of credit. The weighted average rate and life of the Company's debt was 7.5% and five years, respectively. The total debt represented 37.1% of the cost of hotels. Fixed rate debt, including interest rate swaps, amounted to 91% of total debt.

Mr. Silver stated, "Our total debt-to-hotel costs remains near a five-year low, despite the completion of two acquisitions in the first quarter 2004. We will remain vigilant in maintaining the right capital structure, which affords us the ability to add new hotels to the Company's portfolio and preserve our strong balance sheet."

Dividend

The level of Equity Inns' common dividend will continue to be determined by the operating results of each quarter, economic conditions, capital requirements, and other operating trends. For the first quarter 2004, Equity Inns paid a $0.13 common dividend per share and $0.546875 preferred dividend per share. The cash available for distribution (CAD) payout ratio was 86% for the twelve-month period ending March 31, 2004.

Additional First Quarter Events

-- Equity Inns awarded three management contracts to Innkeepers Hospitality for the management of three Residence Inns in Princeton, New Jersey; Tinton Falls, New Jersey; and Burlington, Vermont. Additionally, the Company awarded a Holiday Inn management contract in Winston-Salem, North Carolina to Wright Hospitality. Awarding management contracts of these four hotels to two of Equity Inns' current management companies with a strong operating history should have long-term positive benefits.

-- Equity Inns completed the purchase of a Marriott Courtyard Hotel in Tallahassee, Florida, and a Residence Inn in Tampa, Florida, which were part of the group of acquisitions from the McKibbon Group, Inc. previously announced in October 2003. Both of these hotels are less than five years old.

-- Equity Inns signed a definitive agreement to acquire five additional Marriott properties from McKibbon Hotel Group, Inc. The properties include two Marriott Courtyards in Asheville, North Carolina, and Athens, Georgia, and three Residence Inns by Marriott in Chattanooga, Tennessee; Knoxville, Tennessee; and Savannah, Georgia. These properties have an average age of seven years.

-- Equity Inns divested three exterior corridor hotels: two Hampton Inns in Florida and one Comfort Inn in Texas. These hotels have an average age of 17 years.

Recent Events

-- On April 7, 2004, the Company issued 2.4 million shares of common stock, resulting in net proceeds of approximately $21.4 million. The proceeds will be used to fund $16 million in previously announced acquisitions, with the remainder used to reduce debt on the Company's $110 million line of credit.

-- On April 29, 2004, Equity Inns completed the acquisitions of a Residence Inn in Tallahassee, Florida, and a Marriott Courtyard in Gainesville, Florida, which were the final two of four acquisitions previously announced in October 2003.

Mr. Silver concluded, "We have been focused on upgrading our hotel portfolio by simultaneously acquiring and divesting hotels that will drive our portfolio mix toward newer, higher-end properties in growing markets. Year-to-date, we have closed four of the nine acquisitions that we have announced since October 2003 and are on track to complete all these transactions before the end of the second quarter, as expected. We are actively evaluating additional properties than can further improve our mix, though we will proceed in a disciplined manner that will enable us to maintain a strong capital structure."

2004 Guidance

Based upon expectations for improvement in the upscale and mid-scale lodging sectors, recent acquisitions and divestitures, along with planned expense increases for this year, the Company now expects 2004 EBITDA will be in the range of $73 million to $77 million and RevPAR increases will be in the range of 2.0% to 4.5%. The Company is currently anticipating 2004 capital expenditures of approximately $17 million. Anticipated increases in expenses will be mainly driven by costs associated with payroll and benefits, technological improvements and new brand related standards at the hotel level.

As a result of these assumptions, management expects 2004 AFFO to be in the range of $0.76 to $0.85 per diluted share, and net loss per share to be in the range of ($0.11) to $0.00. While the announced acquisitions are expected to be accretive to AFFO on a full-year pro forma basis, given the timing of completing these transactions before the end of the second quarter, management estimates that these acquisitions will have minimal effect on 2004 AFFO.

In addition, Equity Inns expects that its remaining 2004 quarterly results will contribute to full year AFFO in the following manner: 33% in the second quarter, 36% in the third quarter and 17% in the fourth quarter. As such, AFFO is expected to be in the range of $0.25 to $0.28 in the second quarter 2004.

About Equity Inns

Equity Inns, Inc. (S&P, B+ Corporate Credit Rating, Negative) is aself-advised REIT that focuses on the upscale extended stay, all-suite and midscale limited-service segments of the hotel industry.The company owns 94 hotels with 12,100 rooms located in 34 states.For more information about Equity Inns, visit the company's Website at http://www.equityinns.com

EXIDE TECHNOLOGIES: Court Okays Technical Modification to Plan--------------------------------------------------------------At the conclusion of the April 16, 2004 Confirmation Hearing, the Court indicated that the Joint Reorganization Plan of the Exide Technologies Debtors and the Official Committee of Unsecured Creditors would be confirmed subject to the submission of an appropriate order addressing certain resolutions of objections to the Joint Plan and incorporating the rulings of the Court with respect to the Joint Plan.

The Debtors and the Committee ask the Court to approve a technical amendment to the Joint Plan and the Plan Supplement for the Joint Plan.

James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in Wilmington, Delaware, states that the modifications to the Joint Plan and Plan Supplement relate to the establishment and operation of a reserve for potential payment of disputed claims in Class P4 comprised of authorized but not issued New Exide Common Stock and New Exide Warrants and their proceeds.

The Joint Plan is amended to add this provision as Article VIII, Section D of the Joint Plan:

"As specified in Article VIII.A.6 hereof, prior to the Effective Date, the Creditors Committee shall establish, and the Debtors shall implement, an appropriate and reasonable reserve for potential payment of Disputed Claims in Class P4 comprised of authorized but not issued New Exide Common Stock and New Exide Warrants and in each case the proceeds thereof, if any. To the extent the reserved shares of New Exide Common Stock and New Exide Warrants are insufficient to provide for a Pro Rata distribution to any Holder of a Disputed Claim as it becomes an Allowed Claim, the Company may issue additional shares of New Exide Common Stock and New Exide Warrants (each such additional distribution, an "Additional Class P4 Distribution) such that such Holder receives a distribution constituting the same Pro Rata recovery as other Holders of Allowed Claims in Class P4, taking into consideration the Noteholder Distribution Settlement. . . ."

Mr. O'Neill assures the Court that the proposed Technical Amendment does not alter the classification of the claims of the Joint Plan. Thus, the Joint Plan does not implicate the classification rules of Section 1122 of the Bankruptcy Code.

The Debtors and the Committee believe that the proposed Technical Amendment is non-material, and that no additional solicitation is required as a result of the requested modifications.

EnerSys Objects

Thomas G. Whalen, Jr., Esq., at Sevens & Lee, in Wilmington, Delaware, points out that the second sentence of the proposed new language of Article VIII, Section D of the Joint Plan, states that if additional shares or warrants are needed to insure pro rata distribution, they "may" be issued. EnerSys, Inc., believes that the amendment should state that, under the circumstances, additional shares and warrants "shall" be issued unless alternative compensation acceptable to the holder of the applicable claim is provided. Any other resolution leaves open the possibility that holders of Disputed Class P4 Claims would not receive pro rata distributions.

Accordingly, EnerSys asks the Court to deny approval of the Technical Amendment unless the language added is modified.

* * *

After due deliberation, Judge Carey approves the Technical Amendment to the Joint Plan and Plan Supplement, as modified on the record.

Headquartered in Princeton, New Jersey, Exide Technologies is the world-wide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000)

FEDERAL-MOGUL: U.S. and U.K. Debtors to Honor Pension Plans -----------------------------------------------------------The U.S. and U.K. Debtors of Federal-Mogul Corporation have numerous defined benefit and contribution savings and pension plans. On and after the Effective Date, the U.S. Debtors will continue to perform their obligations under the Plans.

Pension Plans of the U.S. Debtors

The U.S. Debtors provide certain of their employees with a defined benefit pension plan under the Federal-Mogul Corporation Pension Plan. Pursuant to Pension Plan, a benefit is payable to the employee or other designated beneficiary on the employee's retirement from the company, total and permanent disability, or death. The U.S. Defined Benefit Plan's assets have a market value of $651 million as of December 31, 2003. Based on current actuarial analyses and the Debtors' business plans, the Debtors anticipate that the funding requirements for the U.S. Defined Benefit Plan will be $54.5 million for 2004, $130.2 million for 2005, $97.5 million for 2006, and $22.5 million for 2007.

As of January 1, 2002, the Debtors estimated that there were 16,230 active employees of the U.S. Debtors who are participants in the U.S. Defined Benefit Plan, as well as 7,500 retirees receiving benefits from the plan. There are an additional 110,700 persons who are not active employees of the U.S. Debtors and not presently receiving benefits under the U.S. Defined Benefit Plan that are eligible to receive benefits thereunder in the future.

The T&N Pension Plan is the larger of the U.K. defined benefit plans, with assets having a current market value of GBP996.4 million as of February 29, 2004. Membership in the T&N Pension Plan is available to all permanent employees of companies previously part of the T&N group. The anticipated cost of the T&N Retirement Benefits Scheme for 2004 is GBP7.5 million. Future costs beyond 2004 are subject to re-evaluation by the plan actuary and agreement between the company and the trustee.

As of December 31, 2003, the Debtors estimate that there are 2,600 active employees of the U.K. Debtors participating in the T&N Pension Plan, as well as 20,570 retirees receiving benefits from the scheme. In addition, there are 14,820 persons who are not active employees of the U.K. Debtors not presently receiving benefits under the T&N Pension Plan that are eligible to receive benefits thereunder in the future.

Membership in the FM Ignition Pension Plan is closed to new members. Current active members are employees who joined the FM Ignition Pension Plan when it was open prior to May 1997. As of January 31, 2004, there are 303 active employees of the U.K. Debtors participating in the FM Ignition Pension Plan, as well as 531 retirees receiving benefits from the scheme. In addition, there are 438 persons who are not active employees of the U.K. Debtors not presently receiving benefits under the FM Ignition Pension Plan that are eligible to receive benefits in the future.

The U.K. Debtors also operate one defined contribution pension plan, the Champion Automotive Retirement Benefits Plan or the U.K. Defined Contribution Plan, for certain of their employees. Membership in the U.K. Defined Contribution Plan is limited to employees of Federal-Mogul Ignition (UK) Limited who joined Federal-Mogul (UK) Ignition Limited after closure of the FM Ignition Pension Plan. The maximum matching company contribution is 6% to 12% and generally is twice the particular employee's contribution. As of January 5, 2004, there are 77 active employees of the U.K. Debtors participating in the U.K. Defined Contribution Plan, as well as 65 persons who are not activeemployees of the U.K. Debtors not presently receiving benefits under the U.K. Defined Contribution Plan that are eligible to receive benefits in the future.

FINOVA cautions investors that the facts and assumptions underlying the projections will change, and those changes may cause significant positive or negative differences to the projected results. Many of the facts and assumptions are beyond the control of FINOVA and/or its customers. FINOVA anticipates that there will be differences between the projections and FINOVA's actual results, so investors should not place undue reliance on the projections. The projections should be read in conjunction with the audited financial statements and the notes thereto, prepared in accordance with generally accepted accounting principles, contained in FINOVA's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 both filed with the Securities and Exchange Commission.

The financial projections are derived from management's estimates of future cash flows to be collected from FINOVA's portfolio of assets. The cash flow estimates assume, among other things, that the asset portfolios are collected in an orderly fashion over time and do not represent estimated recoverable amounts if FINOVA were to undergo a short-term asset liquidation. Management believes a short-term liquidation would have a material negative impact on FINOVA's ability to recover amounts recorded in FINOVA's audited financial statements and in the projections.

FINOVA's process of developing the projections included an assessment of its portfolio on a transaction-by-transaction basis. Estimates of payments to holders of Senior Notes were based on information and assumptions as of the date each asset was assessed concerning general economic conditions, specific market segments, the financial condition of FINOVA's customers, an assessment of the underlying collateral and management's estimation as to the ultimate outcome of individual transactions. In addition, management made assumptions concerning the customers' ability to obtain full refinancing of balloon obligations or residuals at maturity. As a result, some of the projected results assume FINOVA will incur refinancing discounts for certain transactions. In other cases, FINOVA assumed full repayment of contractual balances, including numerous instances of recoveries or collections in excess of asset values reflected in FINOVA's audited financial statements. The projections anticipate individual asset sales and prepayments that FINOVA is both currently discussing with customers and believes are likely to occur. The projections do not assume any bulk asset sales or more speculative prepayments. Asset sales or prepayments may or may not occur as projected.

The projections extend through the principal maturity date of the Senior Notes, which are due in November 2009. The Senior Notes are reflected on FINOVA's balance sheet net of an unamortized fresh-start discount. FINOVA is obligated to pay the full principal amount outstanding on the Senior Notes. The projections indicate no principal repayments beyond year-end 2007.

Although the projections anticipate receipt of cash flows through November 2009, there can be no assurance that sufficient cash flows will continue through that date to cover scheduled interest payments on the Senior Notes and operating expenses. FINOVA's actual cash collections on its portfolio have generally occurred faster than anticipated. The projections currently forecast that sufficient cash flow will be generated to cover interest payments on the Senior Notes as well as operating expenses through November 2009. The projections, however, do not forecast the availability of sufficient assets to fully repay the remaining principal of the Senior Notes due at maturity. Moreover, if the portfolio liquidation occurs faster than projected, FINOVA's portfolio may not generate sufficient funds to cover operating expenses and interest payments before the Senior Notes mature in November 2009. Experiencing a shortfall in cash to cover operating expenses could adversely interfere with the ability to continue the liquidation of the remaining portfolio in an orderly fashion. As has previously occurred, portfolio runoff may accelerate due to asset sales, prepayments and other factors. Based on past experience, FINOVA expects that substantial portions of the runoff may actually occur faster than reflected in the projections, but as noted above, the projections do not contemplate the sale or prepayment of most assets, even if FINOVA may be attempting to sell or negotiate prepayments for some of those assets.

The projections anticipate that the transportation portfolio will comprise an increasing percentage of FINOVA's portfolio over time. FINOVA has a significant number of aircraft that are off-lease, and the projections anticipate that additional aircraft will be returned to FINOVA as leases expire or as certain operators cease making payments. FINOVA expects to scrap many of those aircraft, but also assumes it will park and maintain some aircraft for sale or re-lease at a later date. While the current inactive market for aircraft makes it difficult to predict, FINOVA believes that the values ultimately realized under this liquidation strategy will significantly exceed the values FINOVA would realize if it were to liquidate those aircraft today. Projected recoveries may differ from recorded amounts, and actual realization will be significantly impacted by the future used aircraft market, which is difficult to predict.

The process of estimating future cash flows from aircraft is particularly difficult and subjective, as it requires FINOVA to estimate future demand, lease rates and scrap values for assets for which there is currently little or no demand. In addition, the current state of the aircraft industry continues to include significant excess capacity for both new and used aircraft and lack of demand for certain classes and configurations of aircraft within our portfolio. Management considered these factors when determining anticipated useful lives, scrap values and its assessment of FINOVA's ability to lease or sell its aircraft.

The projections assume that FINOVA will pay virtually no income taxes during the projection period. FINOVA has substantial net operating loss carryforwards and other tax attributes that are expected to offset its taxable income, including income related to the reversal of deferred tax liabilities. The projections do not assume any additional cash benefit from unused net operating loss carryforwards at the end of the projection period.

FINOVA's critical accounting polices are detailed in the Annual and 10-Q Reports. Accounting rules permit valuation allowances established on financing assets after implementation of fresh-start reporting to be increased or decreased as facts and assumptions change. However, many financing assets were previously marked down for impairments that existed at the time fresh- start reporting was implemented in 2001. These marked down values became FINOVA's new cost basis in those assets, and accounting rules do not permit the carrying value of these assets to be increased above that fresh-start cost basis, even if subsequent facts and assumptions result in a projected increase in value, which has occurred for certain assets included in the projections. As a result, in those instances the projections include collections in excess of the carrying amounts reflected in the financial statements.

Impairments of other financial assets (before and after implementation of fresh-start reporting) were marked down directly against the assets' carrying amount. Accounting rules permit further markdowns if changes in facts and assumptions result in additional impairment; however, most of these assets (with certain exceptions) may not be marked up in the financial statements, even if subsequent facts and assumptions result in a projected increase in value, which has occurred for certain assets included in the projections. As a result, in those instances the projections include collections in excess of carrying amounts reflected in the financial statements.

The projections were prepared for management's internal use and were not prepared with a view to compliance with the published guidelines of the Securities and Exchange Commission or the American Institute of Certified Public Accountants regarding projections or forecasts. FINOVA's auditors have not assisted with the preparation of, nor have they applied testing procedures to, the projections. Accordingly, the auditors do not express an opinion or any other form of assurance regarding the projections. Although the projections are presented with numerical specificity, as indicated elsewhere in this release, they are based on various estimates and assumptions which may not be realized and are inherently subject to significant business, economic and other uncertainties, many of which are beyond the control of FINOVA. FINOVA's actual results for the projected periods will vary from the projections and such variations are likely to be material, with an increased likelihood of greater variations the further out the projected period. The projections are, therefore, not representations by FINOVA of its future performance. The release of these projections should not be regarded as an indication that FINOVA considers them to be a reliable prediction of future events, and investors should not rely on them for that purpose. FINOVA does not intend, and assumes no responsibility, to update the projections to reflect actual results or changes in assumptions or other factors that could affect the projections, including changes in the underlying facts and assumptions used to prepare the projections.

FIRST VIRTUAL: Appoints 3 New Executives to Senior Management Team------------------------------------------------------------------First Virtual Communications, Inc. (Nasdaq: FVCX), a premier provider of infrastructure and solutions for real-time, rich media communications, announced the appointments of three new executives to its senior management team, adding expertise in the areas of sales, marketing and corporate finance.

Mr. Keith A. Zaky, an industry veteran with 20 years of global sales and executive management experience, has been appointed to the position of vice president of worldwide sales. Mr. Duncan H. Campbell, a 20-year marketing veteran of Hewlett-Packard, has joined the organization as vice president of marketing, and Mr. Andrew P. Morrison, previously vice president of finance and corporate controller for Critical Path, Inc., has been appointed to the position of corporate controller.

Jonathan Morgan, president and CEO of First Virtual Communications, commented, "These three individuals represent excellent performance in their areas of expertise. We believe Keith's proven track record in sales and operations will provide the leadership we need to deliver increased revenue and strategic partnerships, and will help us reach our objectives and capitalize on emerging opportunities. Further, I am certain that Duncan has the ability to strengthen our market position and global reach for growth over the long term, and Andrew's sound financial operations background makes him an ideal choice for corporate controller."

Mr. Zaky was previously executive vice president of worldwide field operations at Persistence Software, an 11-year-old, publicly traded infrastructure software company. Prior to Persistence, Mr. Zaky served with Octel Communications Corporation, a world leader in voice processing from 1985 to 1997, in a number of sales management and executive-level capacities, including western region general manager for the service provider market. In July 1997, Octel was acquired by Lucent Technologies, at which point Mr. Zaky served as vice president, general manager, Asia Pacific region for Lucent, Octel Messaging Division, establishing a regional headquarters in Singapore and helping to grow Octel's presence throughout Asia until 2000. He served on both Lucent, Asia Pacific and Lucent, China executive boards from 1997-2000.

Mr. Campbell joined Hewlett-Packard in 1980 as a product line manager, then held several worldwide director positions for the networking, software and systems divisions within HP over two decades. He also served as worldwide director of marketing for Silicon Graphics from 1994 to 1995. Most recently, he served as worldwide marketing manager for channels, alliances and partners for HP. Mr. Campbell holds an MBA from the University of Pennsylvania, Wharton Graduate School and a Bachelor of Science degree in chemistry from the University of California, San Diego.

The newly appointed corporate controller, Mr. Morrison, joins First Virtual from Critical Path, Inc., where he held various financial positions since May 2000, most recently vice president, finance, and corporate controller. Previously, Mr. Morrison worked for PricewaterhouseCoopers, LLP. Mr. Morrison is a certified public accountant and holds a Bachelor of Science degree in finance and accounting from Boston College.

First Virtual Communications is a premier provider of infrastructure and solutions for real time rich media communications. Headquartered in Redwood City, California, the Company also has operations in Europe and Asia. More information about the company can be found at http://www.fvc.com/

* * *

As reported in the Troubled Company Reporter's May 4, 2004 edition, First Virtual Communications, Inc. (NASDAQ:FVCX) announced that its Audit Committee is in the process of reviewing certain irregular sales transactions. Most of the transactions currently under review involve its sales operations in China. The Company has made personnel changes in China as a result of these transactions.

This investigation was initiated as a result of the Company becoming aware of several of these transactions, and subsequently notifying its Audit Committee and its independent auditors. The Audit Committee has engaged independent counsel to conduct the investigation which is in its early stages.

The Company's auditors will not be able to complete their review of the financial results for the three months ended March 31, 2004 until the investigation is completed and the Company will not be able to release its first quarter financial results on May 4, as previously scheduled. The effect of the irregular sales transactions on the unaudited interim results for the quarter ended March 31, 2004 and on previously issued annual and quarterly financial statements, if any, has not been determined, and it is not known whether the Company will be required to restate prior period financial statements. Since the investigation will not be completed by the May 17, 2004 deadline for the filing of the Company's Quarterly Report on Form 10-Q, the Company will not be able to file this Form 10-Q on a timely basis.

FLEMING COMPANIES: Wants to Assume Oregon NL Distribution Lease---------------------------------------------------------------The Fleming Companies, Inc. Debtors seek the Court's authority to assume a lease agreement between NL Properties and Core-Mark International, Inc., dated December 15, 1993, for premises located in Milwaukie, Oregon, for use as a distribution facility. The current lease will expire on June 30, 2004, but was amended on January 12, 2004, to extend the term until July 31, 2009. The amendment also provides for a reduction in the monthly base rent for the period from July 1, 2004, through June 30, 2005, as well as two rent abatements. In exchange for the extension of the lease term, the base rent reduction and the abatements, Core-Mark agreed to assume the lease effective as of April 30, 2004. Core-Mark has no outstanding payment due under the lease agreement.

Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub PC in Wilmington, Delaware, explains that continued use of the premises as a distribution facility is necessary to the operation of Core-Mark's business. Furthermore, the lease terms are more favorable than the terms that would be available "through an alternative transaction."

If the lease is not assumed, the lease will expire on June 30, 2004, and Core-Mark would be forced to expend substantial time and resources to locate and negotiate for an alternative distribution facility, which may prove difficult due to the time constraints. Moreover, because Core-Mark uses this premises as a distribution facility, Core-Mark would incur extremely high costs to remove and transfer to another location all of its products, racking and shelving.

FOAMEX INT'L: March 28 Balance Sheet Insolvent by $205.3 Million ----------------------------------------------------------------Foamex International Inc. (NASDAQ: FMXI), the leading manufacturer of flexible polyurethane and advanced polymer foam products in North America, announced its 2004 first quarter results.

Sales & Gross Profit

Net sales for the first quarter of 2004 were $313.6 million, down 4% from $328.2 million in the first quarter of 2003. Gross profit in the first quarter of 2004 was $39.8 million, up 30% from $30.5 million in the first quarter of 2003. Gross profit margin for the first quarter of 2004 was 12.7%, up from 9.3% in the first quarter of 2003, and the fifth consecutive quarter of gross profit margin recovery. The gross profit margin improvement reflects lower overall plant operating costs and a better mix of value-added products.

Earnings

Net loss for the first quarter of 2004 was $2.1 million, or $0.09 per diluted share, compared with a net loss of $10.4 million, or $0.43 per diluted share in the first quarter of 2003.

Income from operations was $13.2 million for the first quarter of 2004, up 37% from $9.6 million in the first quarter of 2003. Selling, general and administrative expenses for the first quarter of 2004 were $26.0 million versus $20.9 million in the first quarter of 2003. The quarter's SG&A expenses include a charge of $3.7 million related to the bankruptcy of a major customer. Interest and debt issuance expense for the first quarter of 2004 was $18.6 million, a decrease from $19.1 million in the first quarter 2003, primarily due to lower amortization of debt issuance cost.

Commenting on the results, Tom Chorman, Foamex's President and Chief Executive Officer, said: "We are encouraged with the improvement we have seen in several areas this quarter, particularly since we absorbed a significant charge associated with the bankruptcy of a major bedding customer. Our continued focus on developing more consumer oriented products, improving our supply chain efficiency and overall cost management is showing positive results, as Foamex recorded its fifth consecutive quarter of gross profit margin improvement. While we still face difficult marketplace challenges, I remain confident that as the year progresses, Foamex will continue to show improved operating performance."

At March 28, 2004, Foamex International Inc.'s balance sheet shows a shareholders' deficit of $205.3 million compared to a deficit of $203.1 million as of December 28, 2003

Business Segment Performance

Foam Products

Foam Products net sales for the first quarter of 2004 were $134.4 million, up 14% from $118.2 million in the first quarter of 2003 due primarily to higher volumes of value-added products. Income from operations for the first quarter of 2004 was $16.3 million, up 135% from $6.9 million in the first quarter of 2003. The increase primarily reflects the effect of higher volume, improved product mix and improved operating efficiency.

Automotive Products

Automotive Products net sales for the first quarter of 2004 were $94.0 million, down 22% from $121.1 million in the first quarter of 2003. The decrease is primarily the result of customer sourcing actions. Income from operations for the first quarter of 2004 was $5.0 million, down 47% from $9.4 million in the first quarter of 2003, primarily due to the effect of lower volume.

Carpet Cushion Products

Carpet Cushion Products net sales for the first quarter of 2004 were $46.1 million, down 6% from $49.1 million in the first quarter of 2003 due to lower volume. Income from operations in the first quarter of 2004 was $1.3 million as compared to a loss of $0.6 million in the first quarter of 2003, due to the continued benefit from plant consolidations and efficiency improvements implemented over the past year, and lower material costs.

Technical Products

Technical Products net sales for the first quarter of 2004 were $31.1 million, down 4% from $32.4 million in the first quarter of 2003, due to a higher mix of lower priced products which offset a 3% unit volume gain. Income from operations for the first quarter of 2004 was $8.9 million, the same as the first quarter of 2003.

About Foamex International Inc.

Foamex, headquartered in Linwood, PA, is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. For more information visit the Foamex web site at http://www.foamex.com.

FONIX CORP.: Shareholder Deficit Disappears-------------------------------------------Fonix Corp. (OTC BB: FNIX), an industry leader in delivering conversational speech solutions to consumer systems and devices for everyday use through its Fonix Speech Group, and a provider of telephone and data services through its new subsidiaries LecStar Telecom Inc. and LecStar DataNet, announces financial results for the quarter ended March 31, 2004.

Fonix revenues were $1,925,000 for the quarter ended March 31, 2004 compared to $590,000 for the same period in 2003. Operating expenses, exclusive of non-cash amortization of $593,000, decreased by $822,000 from $3,952,000 in the first quarter of 2003 to $3,130,000 in the first quarter of 2004. Net loss was $2,342,000 ($0.08 per common share) for the first quarter in 2004 compared to $4,270,000 ($0.30 per common share) for the same period in 2003. The first quarter results reflect the consolidation of the LecStar operations from March 1 through March 31, 2004 and the Fonix Speech Group for the entire quarter.

During the quarter ended March 31, 2004, the company reduced accrued payroll and other compensation-related expenses by $2,241,000 and accounts payable by $752,000. As a result of the acquisition of LecStar and equity financing completed during the quarter ended March 31, 2004, shareholder equity at March 31, 2004 is $6,245,000 compared to a shareholder deficit of $10,397,000 at Dec. 31, 2003.

"Our financial results for the first quarter primarily reflect the synergy of our combined business operations," said Thomas A. Murdock, Fonix chairman and CEO. "We expect further improvement in revenue and cost management as we leverage the operating advantages of both LecStar and the Fonix Speech Group."

"We are encouraged by the results of the restructuring and redirection of our business model," said Roger D. Dudley, Fonix executive vice president and CFO. "Our improving operations provide a solid base for future growth. By significantly reducing combined operating expenses, less non-cash amortization, by 21 percent, we believe the company will continue to improve its operating margin on increasing revenue."

The consolidated pro forma Fonix revenue including LecStar revenue for the full quarter ended March 31, 2004 was $5,029,000. Consolidated pro forma operating expenses, exclusive of non-cash amortization of $593,000, were $6,114,000. Pro forma net loss was $3,842,000 ($0.10 per common share).

GADZOOKS INC: April 2004 Store Sales Decrease by 13.3% to $12.5MM-----------------------------------------------------------------Gadzooks, Inc. (OTC Pink Sheets: GADZQ) announced sales results for the four weeks of fiscal April ended May 1, 2004. Comparable store sales for the 252 stores that the Company currently intends to retain and operate decreased 13.3 percent from fiscal April 2003. Fiscal April sales for the continuing stores totaled $12.5 million. Total sales for fiscal April were $12.6 million including the results of liquidating stores.

Comparable store sales for the continuing stores declined 9.0 percent for the 13 weeks of the first quarter ended May 1, 2004. First quarter sales for the continuing stores totaled $42.9 million. Total sales for the first quarter were $55.9 million including the results of liquidating stores.

"We are satisfied with our above-plan results for April and the first quarter of 2004," said Carol Greer, President and Chief Merchandising Officer. "For the quarter, sales of junior merchandise in the average store increased almost 52%, while average store junior inventories were up only 23%. We continue to be very encouraged by our progress in growing our share of the junior market and increasing the productivity of our inventories."

Greer continued, "Our April comparable store sales results were negatively impacted by anniversarying our men's product liquidation that began in mid- April last year. Since the men's liquidation in the prior year ran through June, we expect our comparable store sales comparisons to be challenging until we reach July and begin to anniversary our initial months as a juniors-only store."

About Gadzooks

Headquartered in Carrollton, Texas, Gadzooks, Inc.-- http://www.gadzooks.com/-- is a specialty retailer of casual clothing, accessories and shoes for 16-22 year-old females. TheCompany filed for chapter 11 protection on February 3, 2004(Bankr. N.D. Tex. Case No. 04-31486). Charles R. Gibbs, Esq., andKeith Miles Aurzada, Esq., at Akin Gump Strauss Hauer & Feld, LLPrepresent the Debtor in its restructuring efforts. When theCompany filed for protection from its creditors, it listed$84,570,641 in total assets and $42,519,551 in total debts.

Squar Milner had been serving as the independent accountant for the Company engaged as the principal accountant to audit the Company's financial statements. The report of Squar Milner dated February 20, 2003, with respect to its audit of the consolidated balance sheet of GT Data as of December 31, 2002, and the related consolidated statements of operations, stockholders' deficit and cash flows for each of the years in the two-year period then ended, stated that certain factors listed in the report raised substantial doubt about GT Data's ability to continue as a going concern.

HARKEN ENERGY: Issues 50,000 Series J Convertible Preferred Stock-----------------------------------------------------------------Harken Energy Corporation (Amex: HEC) announced that on April 28, 2004 it issued an aggregate of 50,000 shares of its Series J Convertible Preferred Stock and approximately 2.9 million warrants to purchase Harken common stock to Alexandra Global Master Fund Ltd. in exchange for $5,000,000 in cash.

The Series J Preferred has a liquidation value of $100 per share, is non-voting and is convertible at the holders' option into common stock at a conversion price of $0.87 per share, subject to adjustments in certain circumstances. The J Preferred rank senior to Harken's common stock and pari passu with other issues of preferred shares by Harken. The warrants issued with the Series J Preferred have a term of one (1) year and a strike price of $0.98 per share. The terms of the J Preferred and warrants are discussed in further detail in Harken's Form 8-K and exhibits filed with the Securities and Exchange Commission on April 29, 2004.

Harken anticipates using the proceeds from the private placement of the J Preferred and warrants to expand and accelerate portions of Harken's drilling objectives previously announced as part of Harken's 2004 capital expenditure plan.

* * *

As reported in Troubled Company Reporter's December 17, 2003edition, Harken Energy Corporation (Amex: HEC) sold the majorityof its oil and gas properties located in the Panhandle region ofTexas. The purchasers agreed to pay approximately $7 Million incash for the Panhandle assets.

In another previous report, Harken Energy Corporation retainedPetrie Parkman & Co., Inc., to evaluate its domestic oil and gasassets and to make recommendations to maximize their value.Harken's domestic assets currently consist of its productiveproperties and prospects along the Gulf Coast of Texas andLouisiana, as well as the Panhandle region of Texas.

Harken's management spent the last few months activelyrestructuring the liability side of its balance sheet andexamining and taking action on its cost structure. While Harken isstill burdened with significant long-term debt, the Company haseffectively dealt with most of its short-term debt without causingexcessive dilution.

HAWK CORP: S&P Revises Outlook to Positive on Improved Performance------------------------------------------------------------------Standard & Poor's Ratings Services affirmed its 'B' corporate credit and other ratings on Cleveland, Ohio-based Hawk Corp. At the same time, the outlook was revised to positive from stable. At March 31, 2004, the specialty components manufacturer had total debt (including the present value of operating leases) of approximately $109 million.

"The outlook revision reflects improved financial performance resulting from the recovery of some of Hawk's end-markets, particularly heavy-duty trucking and construction," said Standard & Poor's credit analyst Heather Henyon. "In addition, the company is focusing on its two core segments, friction products and precision components, in order to improve operating performance and generate cost savings that will be used to reduce debt."

Hawk designs, engineers, manufactures, and markets specialty components made principally from powdered metals for use in aerospace, industrial, and commercial markets.

Hawk is beginning to benefit from improvement of some of its end-markets and the general economic recovery in the U.S. However, products targeting the aerospace and lawn and garden markets continue to experience sales declines, which the company is mitigating through greater focus on the aftermarket. Hawk expects to generate positive free cash flow in 2004, which will be used to fund increased capital expenditures (about $16 million) as the company invests in new technology programs and its global facilities.

In addition, the company announced plans to relocate its Brook Park, Ohio-based friction products facility to Tulsa, Oklahoma, divest itself of its motor business segment; and realign its performance racing segment. Annual cost savings from these activities should enable the company to continue to reduce debt further

"If operating and financial performance continue to improve and the company improves the term structure of its capital structure through refinancing the 2006 maturities, ratings could be raised," Ms. Henyon said.

"We were pleased with our operating results for the quarter," commented George L. Chapman, chief executive officer of Health Care REIT, Inc. "Our $87.3 million of new investments during the first quarter supports our net investment target of $200 million this year. We are well positioned for growth given our solid balance sheet, increased line of credit and our high quality $2 billion portfolio with improving property-level payment coverage ratios."

As previously announced, the Board of Directors declared a dividend for the quarter ended March 31, 2004 of $0.60 per share as compared to $0.585 per share for the same period in 2003. The dividend is a one and one-half cent increase from the dividend paid for the fourth quarter of 2003 and represents the 132nd consecutive dividend payment. The dividend will be payable May 20, 2004 to stockholders of record on April 30, 2004.

Net income available to common stockholders totaled $18.7 million, or $0.36 per diluted share, for the first quarter of 2004, compared with $16.5 million, or $0.41 per diluted share, for the same period in 2003. Funds from operations totaled $35.8 million, or $0.70 per diluted share, for the first quarter of 2004, compared with $28.1 million, or $0.69 per diluted share, for the same period in 2003.

We had a total outstanding debt balance of $1.0 billion at March 31, 2004, as compared with $740.8 million at March 31, 2003, and stockholders' equity of $1.2 billion, which represents a debt to total book capitalization ratio of 47 percent. The debt to total market capitalization at March 31, 2004 was 32 percent. Our coverage ratio of EBITDA to interest was 3.11 to 1.00 for the three months ended March 31, 2004.

Portfolio Update. Two assisted living facilities stabilized during the quarter. We ended the quarter with 11 assisted living facilities remaining in fill-up, representing six percent of revenues. Only two facilities, representing one percent of revenues, have occupancy of less than 50 percent. One facility opened in the third quarter of 2003 after completion of construction and the other facility was a new acquisition last quarter.

As previously announced, Doctors Community Health Care Corporation and its subsidiaries filed for Chapter 11 bankruptcy protection on November 20, 2002. Pursuant to procedures approved by the bankruptcy court, the assets of Doctors were the subject of an auction held on December 10 through December 16, 2003. At the conclusion of that auction, the debtors' independent director declared certain members of Doctors' management the winning bidder. Their bid contemplated a reorganization of Doctors and its subsidiaries with new equity and debt capitalization. Pursuant to the plan of reorganization, we entered into mortgage financings totaling $22.2 million with the reorganized Doctors.

Straight-line Rent. We recorded $6.7 million of straight-line rent for the quarter. Straight-line rent includes $601,000 in cash payments outside the normal monthly rental payments for the three-month period.

Outlook for 2004. We are confirming our 2004 guidance and expect to report net income available to common stockholders in the range of $1.68 to $1.73 per diluted share, and FFO in the range of $2.99 to $3.04 per diluted share. The guidance assumes no change in our forecast for net investments of $200 million. Additionally, we plan to manage the company to maintain investment grade status with a capital structure consistent with our current profile. Please see Exhibit 14 for a reconciliation of the outlook for net income and FFO.

Health Care REIT, Inc. (Fitch, BB+ Outstanding Preferred Share Rating, Positive Outlook), with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. For more information on Health Care REIT, Inc., via facsimile at no cost, dial 1-800-PRO-INFO and enter the company code - HCN. More information is available on the Internet at http://www.hcreit.com/

HOMESTORE: March 31 Shareholder Deficit Balloons to $2.5 Million ----------------------------------------------------------------Homestore, Inc. (Nasdaq: HOMS), the leading provider of real estate media and technology solutions, reported financial results for the first quarter ended March 31, 2004. Total revenue for the first quarter was $56.1 million, compared to $54.9 million in the fourth quarter of 2003. The gross margin improved to 75 percent from 74 percent in the previous quarter.

Homestore also reported that the net loss for the first quarter was $(5.1) million, or $(0.04) per share, compared to a net loss of $(12.1) million, or $(0.10) per share, for the fourth quarter of 2003. Results for the fourth quarter included a restructuring charge of $4.1 million and an impairment charge of $1.8 million. Earnings before interest, restructuring charges and certain other non-cash expenses, principally stock-based charges, depreciation, and amortization, referred to by the company as "EBITDA," was $602,000 in the first quarter, compared to a loss of $(770,000) in the fourth quarter of 2003. The improvement in EBITDA was primarily due to increases in the Company's revenue. The Company has historically reported income (loss) from operations because management uses it to monitor and assess the Company's performance and believes it is helpful to investors in understanding the Company's business. Starting with 2004's first quarter results, the Company will refer to income from operations as EBITDA. No changes to the calculation were made, so EBITDA is comparable to income from operations in prior periods.

At March 31, 2004, Homestore had $41.1 million in cash and short-term investments available to fund operations, an increase of $5.5 million from the previous quarter. The first quarter represents the first quarter in the Company's history that resulted in positive cash flow from operations in its consolidated statements of cash flows.

"We achieved several milestones in our first quarter, including our first year-over-year quarterly revenue growth, positive EBITDA, and positive cash flows from operations," said Mike Long, Homestore's chief executive officer. "While our investment and repositioning efforts are ongoing, I believe these results demonstrate the significant value our solutions offer the real estate industry, and early returns on the investments the Company has made over the last two years."

At March 31, 2004, Homestore, Inc., records a total stockholders' equity deficit of $2,455,000 compared to a deficit of $328,000 at December 31, 2003

Year-Over-Year Quarterly Results

Revenue for the first quarter totaled $56.1 million, versus $54.9 million for the first quarter of 2003. The year-over-year increase in revenue is due to increases in the Company's Media Services segment of $1.7 million and Software segment of $0.2 million, offset by a $0.6 million decrease in revenue in the Print segment.

The net loss for the quarter was $(5.1) million, or $(0.04) per share, compared to net income of $87.2 million, or $0.72 per share, in the first quarter of 2003. Net income for the first quarter of 2003 included a $104.1 million one-time gain related to the settlement of the AOL distribution agreement.

Update On Settlement Of Shareholder Class Action Lawsuit

In October 2003, Homestore announced a preliminary court approval of the settlement agreement between Homestore and The California State Teachers' Retirement System (CalSTRS) related to the consolidated shareholder class action lawsuit. On March 16, 2004, the Court issued its "Order Granting Motion for Final Approval of Partial Class Settlement and Directing Renotice of the Class." The Order directed that an abbreviated class notice be published and extended the deadline for class members to opt out or submit claims until May 31, 2004.

As a part of the settlement, Homestore agreed to pay $13.0 million in cash and issue 20.0 million new shares of common stock valued at $50.6 million as of August 12, 2003. In October 2003, Homestore placed $10.0 million in escrow upon preliminary approval by the U.S. District Court, and the final $3.0 million was put in escrow in April 2004. Following final judicial approval of the settlement, the $13.0 million and 20.0 million shares of newly issued common stock will be distributed to the class by the Court. Additional information regarding the settlement agreement is included in documents Homestore files from time to time with the Securities and Exchange Commission.

About the Company

Homestore, Inc. (Nasdaq:HOMS) is the leading provider of real estate media and technology solutions. The Company operates the number one network of home and real estate Web sites including flagship site REALTOR.comr, the official Web site of the National Association of REALTORSr and HomeBuilder.com(TM), the official new homes site of the National Association of Home Builders. Homestore also operates RENTNETr, an apartments, corporate housing and self-storage resource and Senior Housing Netr, a comprehensive resource for seniors, as well as Homestore.comr, a home information resource. Homestore's print businesses are Homestorer Plans and Publications and Welcome Wagonr. Homestore's professional software divisions include Computers for Tracts(TM), Top Producerr Systems and WyldFyre(TM) Technologies. For more information, go to http://ir.homestore.com/

Simpson's reports on the Company's financial statements for the year ended December 31, 2002 raised substantial doubt about its ability to continue as a going concern.

The decision to change accountants was recommended by the Company's Board of Directors.

On March 19, 2004 the Company engaged Malone & Bailey, P.C., certified public accountants, as its independent accountants to report on the Company's balance sheet as of December 31, 2003, and the related combined statements of income, stockholders' equity and cash flows for the year then ended. The decision to appoint Malone & Bailey was approved by the Company's Board of Directors.

"The ratings on Mountain View, California-based Juniper Networks Inc. continue to reflect the challenges of a rapidly evolving and highly competitive industry, as well as the company's good niche position as a supplier of high-performance data networking equipment and its ample operational liquidity," said Standard & Poor's credit analyst Bruce Hyman.

Juniper Networks supplies routers and related networking products, which perform the message management and message transfer roles in the Internet and other networks. It had debt and capitalized operating leases of $694 million at March 31, 2004.

The company had focused its efforts on the highest-performance "backbone" router market, principally for service providers, competing against industry leader Cisco Systems Inc. Service providers have been a growing market for Juniper's products as they transition their networks towards Internet Protocol (IP) communications, although Juniper has not had a major presence with enterprise customers, historically the major consumers of IP equipment. Juniper has been broadening its IP product range, to serve the carriers' network access market, while continuing to introduce high-performance products to sustain carriers' interest and demonstrate continued technological capabilities. Juniper Networks has also introduced products for the wireless and cable industries.

Class Q is not rated by Fitch Ratings. Classes A-1, A-2, A-3, A-4, B, C, D, E, and XP are offered publicly, while classes A-1A, F, G, H, J, K, L, M, N, P, Q, and XC are privately placed pursuant to Rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 72 fixed rate loans having an aggregate principal balance of approximately $979,850,322, as of the cutoff date.

MIRANT CORP: Court Approves Mobile Energy Termination Agreement---------------------------------------------------------------In 1994, the Scott Paper Company sold an energy complex located in Mobile, Alabama to Mobile Energy Services Holdings, Inc., a subsidiary of The Southern Company. The Energy Complex was transferred in 1995 by MESH to Mobile Energy Services Company, LLC, which at the time was owned 99% by MESH and 1% by Mirant Services, LLC. Mirant Services transferred its 1% interest in MESC to MESH in late 2000, and MESC become wholly owned by MESH.

Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas, relates that after its acquisition by MESC, the Energy Complex was operated and maintained by Mirant Services pursuant to a "Facility Operations and Maintenance Agreement," dated as of December 12, 1994, executed by Mirant Services and MESC. Mirant Services continued to operate the Energy Complex through March 2001, when a new operator was put into place.

In 1995, MESC issued about $255,000,000 of publicly traded bonds and reissued $85,000,000 of tax exempt bonds secured by various of its assets.

According to Mr. Peck, the transaction documents relating to MESC's acquisition of the Energy Complex were structured so that MESC had separate energy services agreements with a tissue mill and pulp mill owed by Scott and a paper mill owned by S.D. Warren Alabama, LLC, which had been a Scott subsidiary but was sold in late 1994 to a third party.

In 1995, Kimberly-Clark Corporation acquired Scott. In 1998, Kimberly-Clark advised MESC that it was closing its pulp mill effective September 1, 1999. The pulp mill accounted for about 50% of MESC's revenues and 80% or more of its fuel. On January 14, 1999, MESC and MESH filed for bankruptcy in the United States Bankruptcy Court for the Southern District of Alabama.

Following MESC's and MESH's bankruptcy filings, Mr. Peck informs the Court that Mirant Corporation worked with the bondholders of MESH and MESC to try to maximize the value of those entities to the bondholders. On February 9, 2000, Mirant Services, Mirant Corp., MESC and MESH entered into a "MESC Cogeneration Development Agreement" pursuant to which Mirant Services and Mirant Corp. were to provide assistance to MESC in developing a cogeneration project on site and were to provide MESC a turbine for the project. In exchange, MESC:

(ii) agreed to indemnify Southern, Mirant Services and Mirant Corp. and their affiliates against certain losses or costs they might incur relating to MESC.

Among the obligations for which MESC indemnified the Mirant Entities were:

(1) a guaranty provided by Southern to the owners of the pulp, paper and tissue mills of MESC's obligations to each mill owner under separate environmental indemnity agreements that MESC has with each of the three mill owners, which guaranty is capped at $15,000,000 in 1994, escalating at the Producer Price Index; and

(2) obligations under an agreement with the tree mill owners under which Southern is required to fund an account for $2,000,000 to be used to pay for maintenance services under certain circumstances.

In addition, in the first amendment to the Development Agreement, MESC and MESH agreed to indemnify Southern from certain adverse income tax consequences resulting from the occurrence of certain specified events, as specified in a "Tax Indemnification Agreement" dated September 2, 2000.

In the Spring of 2000, Southern announced its intent to spin off Mirant Corp. In connection with that spin off, all business activities being conducted by Mirant Corp. and its subsidiaries were intended to be spun off from Southern as a stand alone business. However, having Mirant own MESH and MESC raised certain regulatory concerns under the Public Utility Holding Company Act of 1935. Consequently, Southern, which was already subject to the PUHCA, continued to own MESC and MESH after its spin off of Mirant Corp. and an agreement was reached whereby Mirant Corp. incurred certain indemnity obligations to Southern relating to MESC and MESH.

Mr. Peck reports that the MESH and MESC plans of reorganization were confirmed on or about September 23, 2003. Under those plans, the ownership of Southern of MESC and MESH was terminated upon the Effective Date of those plans. Unless waived by the applicable parties, occurrence of the Effective Date was predicated upon, among other things, execution by MESC, MESH, Mirant Corp., Mirant Services, Southern and others of the Intercreditor Agreement. The Court already granted the Debtors' request to enter into the Intercreditor Agreement on December 23, 2003.

After its ownership in MESC and MESH was terminated, Southern continued to have the indemnity obligations to the mill owners that pre-dated the plans. Moreover, under the indemnity arrangement instituted when Southern spun off Mirant Corp., Mirant Corp. allegedly has an obligation to indemnify Southern for any payments that Southern might become required to make under its obligations to the mill owners, which obligations could run into the millions of dollars.

Mr. Peck notes that nowhere in the Intercreditor Agreement or in any other document or order did Mirant Corp. or any of its affiliates admit that it has any indemnity obligations to Southern. Furthermore, at no time has Mirant or any of its affiliate assumed the agreement to indemnify Southern. Those relationships between Mirant Corp. and Southern remained unaffected by the Intercreditor Agreement, the documents executed concurrently therewith, and the confirmed plans of MESC and MESH. Nevertheless, Mirant Corp. and Mirant Services are informed that Southern contends that those indemnity obligations of Mirant Corp. and Mirant Services to Southern are enforceable obligations.

Mr. Peck informs Judge Lynn that part of the consideration Mirant Corp. received under the Development Agreement was that MESC granted to Southern and to Mirant Corp. a priming lien on MESC's assets to secure the indemnity obligations that MESC incurred in favor of Southern and Mirant Corp. as consideration for the obligations incurred by Mirant Corp. in the Development Agreement.

Prior to the confirmation of the MESC and MESH plans, the priming liens had been effectuated through a Court order. However, under the plans, the bondholders were to retain a $1,000,000 claim secured by the same assets "as secure the indemnity obligations" [sic.] to Southern and Mirant Corp. The relative priority of the liens and security interests in the assets of MESC as between the bondholders and Southern and Mirant Corp. was governed by the Intercreditor Agreement.

Under the Intercreditor Agreement, a "Collateral Agent" was appointed for the "Indemnified Parties." Pursuant to certain collateral documentation, MESC granted liens and security interests in its assets to the Collateral Agent, and the Intercreditor Agreement governed the obligations of the Collateral Agent and the rights, obligations and relative priorities of the Indemnified Parties and the Senior Secured Parties relating to the collateral.

By operation of the Intercreditor Agreement and the collateral documentation granting liens and security interests in the assets of MESC to the Collateral agent, Mirant Corp. and Mirant Services became the beneficiaries of liens and security interests in the assets of MESC granted to a Collateral Agent to secure the obligation of MESC to indemnify Mirant Corp. and Mirant Services under the Development Agreement, including for:

(a) any liability arising out of the cancellation of third party contracts due to the termination of the O&M Agreement; and

In addition, as one of the "Indemnified Parties," Southern was the beneficiary of liens and security interests in the assets of MESC to secure the obligation of MESC to indemnify Southern for the Mill Owner Claims. In the event that Mirant Corp. and Mirant Services were to be required to honor the obligation to indemnify Southern and make any payment on account of claims by the mill owners against Southern, Mirant Corp. and Mirant Services would be subrogated to the rights of Southern against MESC and the security.

The one affirmative obligation that Mirant Corp. and Mirant Services incurred under the Intercreditor Agreement was to indemnify the Collateral Agent for "any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time be imposed on, incurred by or asserted against the Collateral Agent" but only to the extent of the interests of Mirant Corp. and Mirant Services in the "Shared Collateral."

The Omnibus Release

The current owners of MESH and MESC have negotiated a sale of the Energy Complex to the Buyer. It is a condition to the sale that MESC's assets, including the Energy Complex, be free and clear of the liens in favor of the parties to the Intercreditor Agreement. To accomplish that release of liens, it was also necessary to terminate certain agreements relating to the Energy Complex and to obtain releases of certain claims. Accordingly, the Buyer asked Mirant Corp. and Mirant Services to enter into the Omnibus Release whereby Mirant Corp. and Mirant Services will:

(iv) terminate certain agreements to which Mirant Corp. or Mirant Services are parties, provided that certain obligations of MESC to indemnify Mirant Corp. or Mirant Services will survive the execution of the Omnibus Release, albeit as unsecured indemnity obligations.

Mirant Corp. and Mirant Services neither give releases to, nor receive releases from Southern, Southern Services or their affiliates. In addition, Southern will obtain releases from the Mill Owners of any claims under the Environmental Guaranty and the Mill Owner Maintenance Reserve Account Agreement, which removes the exposure Mirant Corp. and Mirant Services may have to an obligation to indemnify Southern. The Buyer will acknowledge the lack of claims against Mirant Corp. and Mirant Services in an "Acknowledgment of No Claim" relating to the Energy Complex, MESH and MESC.

Upon Mirant Corp. and Mirant Services' behest, the Court authorizes them to enter into the Omnibus Release pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure.

Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. The Company filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White & Case LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000)

MSX INTERNATIONAL: Returns to Profitability in First Quarter 2004-----------------------------------------------------------------MSX International, a global provider of technical business services, announced net income of $394 thousand on sales totaling $167.3 million for the first fiscal quarter of 2004, which ended April 4, 2004. In comparison, in the first quarter of 2003 the company recorded a net loss of $(3.6) million on net sales totaling $183.4 million. Due to a restructuring program implemented in the second half of 2003, first quarter 2004 operating income increased to $9.3 million. This reflects a $6.3 million improvement compared to operating income of $3.0 million in the same period one year ago.

Frederick K. Minturn, executive vice president and chief financial officer, observed, "Our first quarter results highlight the impact of our actions last year to align our cost structure with current sales volumes. We are pleased to report profitability in the first quarter, which is consistent with our plans for the balance of 2004. Our improving financials are the result of some very dedicated people, who continue to deliver exceptional services to our customers."

Gross profit of $20.6 million in the first quarter was equal to the first quarter of 2003, despite the 8.7% decline in net sales from the earlier period. The impact of lower revenues was offset by reductions in cost of sales totaling approximately $4.2 million. In addition, selling, general and administrative expenses decreased $4.8 million compared to the first fiscal quarter one year ago. Our interest expense totaled $7.8 million in first quarter 2004, a $1.1 million increase from the prior year due primarily to the refinancing of our senior secured debt in August 2003. Net income also reflects a $1.1 million provision for income taxes.

MSX International will host a conference call at 2:00 p.m. EDT today, May 10, to review these results. To listen to the call, dial 212-346-6540 and provide reservation number 21193956. A replay of the call will be available beginning at 4:00 p.m. EDT Monday, May 10, at 800-633-8284 (Domestic) or 402-977-9140 (International), with the same reservation number.

About MSX International

MSX International (S&P, B Corporate Credit Rating, Negative), headquartered in Warren, Mich., is a global provider of technical business services. The company combines innovative people, standardized processes and today's technologies to deliver a collaborative, competitive advantage. MSX International has over 6,100 employees in 25 countries. Visit the company's Web site at http://www.msxi.com/

NATIONAL CENTURY: Agrees to Settle NMC Accounts Receivable Dispute ------------------------------------------------------------------In July 1998, the National Century Financial Enterprises, Inc.Debtors financed Home Medical of America, Inc., an entity substantially all of the equity of which was owned by the founders of the Debtors, in its acquisition of certain home health care agencies from National Medical Care, Inc. The Debtors purchased accounts receivable from these newly acquired businesses.

* NMC's representations and warranties regarding the accounts receivable in connection with the sale of its businesses; and

* HMA's and the Debtors' alleged collection of accounts receivable that had not been purchased from NMC.

In December 1998, HMA did not make the final $10,000,000 payment due to NMC in connection with the acquisition. NMC claimed that the Debtors guaranteed this payment and that the Debtors are liable for various other obligations, including their alleged failure to remit the proceeds of non-purchased receivables.

On March 17, 2000, NMC commenced a lawsuit against HMA, HomeCare Concepts of America, Inc., Chartwell Caregivers of New York, Inc., Craig Porter, the Debtors and certain other parties in the Commonwealth of Massachusetts, Middlesex Superior Court. NMC and the Debtors each asserted claims and counterclaims in the NMC Litigation for tens of millions of dollars. After discovery and briefing on summary judgment were completed, the NMC Litigation was stayed because of the Debtors' bankruptcy filing.

In the NMC Litigation, the HMA Entities assert direct claims against NMC, including claims for misrepresentation of the amount of accounts receivable. The Debtors' claims are intertwined with the HMA Entities' claims as the subsequent purchaser of the accounts receivable from the HMA Entities. In addition, the Debtors allege that the HMA Entities purchased certain accounts receivable from NMC, the proceeds of which total $1.4 million and are held by NMC in an account at Bank of America.

NMC has asserted claims against HMA for its failure to make the final $10 million payment and to satisfy other obligations due as part of the acquisition and against the Debtors on account of their alleged guarantee of that final payment and the other acquisition obligations. NMC also asserted that HMA and the Debtors collected non-purchased accounts receivable allegedly owned by NMC, including but not limited to $5.9 million of funds collected and retained by the Debtors from intradialytic parenteral nutrition accounts. Prior to the Petition Date, the Debtors interplead $5.9 million in the NMC Litigation on account of the IDPN accounts.

In February 2003, NMC sought to modify the automatic stay to continue the Massachusetts Action. In May 2003, the Court modified the automatic stay for the limited purpose of allowing the pending summary judgment motions to be decided by the Massachusetts court. In September 2003, the Massachusetts court denied all pending summary judgment motions. In December 2003, NMC filed a further motion for modification of the stay to continue the NMC Litigation. In February 2004, the NCFE Debtors objected to NMC's request.

NMC filed Claim Nos. 621-624 and 861-862 in these cases, in the aggregate amount of $150,000,000. On January 14, 2004, the Debtors objected to the NMC Proofs of Claim.

On February 2, 2004, NMC asked the Court to temporarily allow its claims for voting purposes pursuant to Rule 3018 of the Federal Rules of Bankruptcy Procedure. On February 9, NMC asked the Court to abstain from hearing the Debtors' Objection and Motion to Disallow Claims. The Debtors objected to NMC's request. On February 12, 2004, NMC filed its objection to the confirmation of the NCFE Plan.

Consequently, the Debtors and NMC agreed to resolve all their disputes, including:

* the NMC Litigation and all other pending litigation between the parties;

* the treatment of the NMC Proofs of Claim;

* the Stay Modification Motion, the Rule 3018 Motion, the Abstention Motion and the Plan Objection; and

* any and all other claims or assertions of any nature between or among NMC and the Debtors.

The HMA Entities are not a party to the settlement agreement between the Debtors and NMC.

The Debtors sought and obtained the Court's authority to enter into the Settlement Agreement with NMC.

The principal terms of the Settlement Agreement:

A. Distribution of Cash

NMC will transfer $600,000 to an escrow agent, to be released to the Debtors on the earlier of:

(a) 91 days from the date on which a resolution of the disputes between NMC and the HMA Entities is consummated -- the Deadline Date -- or

(b) 120 days after the Effective Date, subject to the condition precedent that, as of the Deadline Date, the Debtors have not filed or participated in the filing of an involuntary bankruptcy petition against the HMA Entities.

B. Waiver and Release of Claims

NMC will withdraw and release its claims against the Debtors, and the Debtors will execute a stipulation dismissing their claims in the NMC Litigation and releasing their claims, other than those under the Settlement Agreement.

The Stipulation will:

(a) resolve the NMC Litigation;

(b) extinguish all claims the Debtors have or could have against the Interplead Funds;

(c) release all other claims of the Debtors against NMC and Bruce Bloomstrom arising in connection with the NMC Litigation, including but not limited to claims and causes of action under Chapter 5 of the Bankruptcy Code.

C. Covenants Relating to the HMA Entities

At any time prior to or on the Deadline Date, the Debtors will not file or participate in an involuntary bankruptcy filing of the HMA Entities. The Debtors will not assume, fund, pursue through subrogation or otherwise litigate any claim that the HMA Entities could have asserted against NMC in the NMC Litigation. If the Debtors acquire ownership or control of the HMA Entities while the NMC Litigation remains pending, the Debtors will agree, on the HMA Entities' behalf, to a dismissal of the NMC Litigation with prejudice, and NMC will agree to a dismissal of its claims against the HMA Entities in the NMC Litigation with prejudice.

D. Withdrawal of Pending Motions

The Settlement Agreement will resolve the Rule 3018 Motion, the Abstention Motion, the NMC Claim and the Debtors' Objection, and the NMC Stay Modification Motion.

E. Modification of the Automatic Stay

The automatic stay will be modified to the extent necessary to permit the parties to seek to obtain entry of the stipulation dismissing the NMC Litigation and to permit NMC to otherwise continue to prosecute the NMC Litigation against all parties except the Debtors.

F. Transfer of Liens to Proceeds

Liens against the Debtors' claims against NMC, including attorney liens, will transfer to the proceeds of NMC's payment to the Debtors.

NEW BRITISH: Section 341(a) Meeting Slated for May 26, 2004 -----------------------------------------------------------The United States Trustee will convene a meeting of New British Woods Associates' creditors at 10:00 a.m., on May 26, 2004 in USBA Meeting Room, Room 610 at, Two Hanover Square, 434 Fayetteville St. Mall, Raleigh, North Carolina. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors.

Headquartered in Jacksonville, Florida, New British Woods Associates, is engaged in the business of operating an apartment complex located in Durham County. The Company filed for chapter 11 protection on April 23, 2004 (Bankr. E.D.N.C. Case No. 04-01556). Trawick H. Stubbs, Esq., at Stubbs & Perdue represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of over $10 million.

NUEVO ENERGY: First Quarter Net Income Drops to $7.2 Million------------------------------------------------------------Nuevo Energy Company (NYSE:NEV) reported income from continuing operations for the first quarter 2004 of $7.2 million, or $0.35 per diluted share versus $12.7 million, or $0.65 per diluted share in the year ago period.

The decline in income from continuing operations in the first quarter 2004 versus the year ago period primarily reflects an after-tax derivative loss of $3.4 million ($0.16 per diluted share) and an after-tax loss on early extinguishment of debt of $1.5 million ($0.07 per diluted share). The derivative loss is attributable to losses on three-way crude oil derivative contracts (with price ceilings of $31.00 per barrel) which are marked-to-market through net income for the duration of the crude oil contracts at a currently robust crude oil price strip. The loss on early extinguishment of debt is due to the redemption of the remaining $75.0 million of 9 1/2% Notes.

Net income was $7.1 million, or $0.35 per diluted share in the first quarter 2004, compared to $25.7 million, or $1.33 per diluted share in the first quarter 2003. The decline in net income in the first quarter 2004 versus the year ago period reflects the aforementioned items as well as income from discontinued operations of $4.6 million ($0.24 per diluted share) and the cumulative effect of a change in accounting principle of $8.5 million ($0.44 per diluted share) which were reported in the first quarter 2003.

Net cash provided by operating activities was $15.9 million in the first quarter 2004 compared to $47.1 million in the same period in 2003 due to working capital changes related to the timing of crude oil liftings and payments in our Congo operations, and the annual settlement of certain crude oil derivative contracts made in the first quarter 2004. Discretionary cash flow, a non-GAAP financial measure, was $43.0 million in the first quarter 2004 compared to $44.3 million in the first quarter 2003 which included $4.5 million of discretionary cash flow from discontinued operations.

Production and Prices

Total production from continuing operations decreased 3% to 47.4 thousand barrels of oil equivalent (MBOE) per day in the first quarter 2004 compared to 48.7 MBOE per day in the year ago period. Production from our discontinued operations was 3.3 MBOE per day in the first quarter 2003. Crude oil production of 41.6 thousand barrels (MBbls) per day declined slightly from 42.1 MBbls per day in the comparable period in 2003. The realized crude oil price increased 9% to $23.83 per barrel in the first quarter 2004 versus $21.83 per barrel in the year ago period. Included in the realized crude oil prices are hedging losses of $4.44 per barrel in the first quarter 2004 and $3.68 per barrel in the comparable period a year ago.

Nuevo's first quarter 2004 natural gas production decreased 11% to 35.2 million cubic feet (MMcf) per day from 39.4 MMcf per day in the first quarter 2003 due to a decline in production at the Pitas Point Field, offshore California and a decline in production from a prolific well in the Pakenham Field, West Texas which was placed on production in the first quarter 2003. Nuevo's realized natural gas price was relatively flat at $4.26 per thousand cubic feet (Mcf) in the first quarter 2004 compared to $4.32 per Mcf in the year ago period. Included in the realized natural gas price is a hedging loss of $0.09 per Mcf in the first quarter 2004 and $0.48 per Mcf in the comparable period a year ago.

Costs and Expenses

Total costs and expenses in the first quarter 2004 were $72.5 million versus $65.3 million in the year ago period primarily impacted by higher lease operating expense (LOE). LOE was $44.8 million in the first quarter 2004 compared to $39.3 million in the year ago period. Excluding the natural gas cost and the increased natural gas volume, lease operating expense was $31.4 million in the first quarter 2004 versus $27.5 million in the comparable period in 2003 due to the timing of well workovers offshore California. Natural gas is used to generate steam which in turn facilitates production of heavy oil onshore California. General and administrative (G&A) costs increased to $7.8 million in the first quarter 2004 versus $6.7 million in the same period in 2003 due to legal expenses and merger-related costs. DD&A increased to $18.7 million in the first quarter 2004 compared to $17.4 million in the year ago period due to the Unocal contingent payment buyout in April 2004. The DD&A expense averaged $4.33 per barrel oil equivalent (BOE) in the first quarter 2004 compared to $3.97 per BOE in the year ago period. Interest expense declined 55% to $4.2 million in the first quarter 2004 compared to $9.3 million in the first quarter 2003 due to the redemption of $259.6 million of our 9 1/2% Notes.

Balance Sheet

At March 31, 2004, total debt outstanding was $318.3 million versus $355.0 million at year-end 2003. (Both periods include a long-term liability to unconsolidated affiliate of $115.0 million.) At the end of the first quarter 2004, Nuevo's debt to capital ratio, as defined in our credit agreement, declined to 34% compared to 38% at year-end 2003. The fixed charge coverage ratio improved to 5.4 times for the four quarters ending March 31, 2004 versus 5.0 times at year-end 2003.

Capital Expenditures

Capital expenditures in the first quarter 2004 were $11.4 million compared to $16.9 million in the first quarter 2003.

About Nuevo Energy Company

Nuevo Energy Company is a Houston, Texas-based company primarily engaged in the acquisition, exploitation, development, exploration and production of crude oil and natural gas. Nuevo's producing properties are located onshore and offshore California and in West Texas. Nuevo is the largest independent producer of crude oil and natural gas in California. To learn more about Nuevo, please refer to the Company's internet site at http://www.nuevoenergy.com/

* * *

As reported in the Troubled Company Reporter's February 17, 2004edition, Fitch Ratings has placed the debt ratings of Nuevo Energyon Watch Positive following the announcement that PlainsExploration & Production Company will acquire Nuevo. Currently,Fitch rates Nuevo's senior subordinated debt 'B' and its trustconvertible securities 'B-'.

Plains anticipates issuing 37.4 million shares to Nuevoshareholders and assuming $234 million of net debt and $115million of Trust Convertible Securities. The transaction isexpected to close in the second quarter of 2004. The rationale forthe Watch Positive includes the size of the new entity, which willapproach 489 million barrels of oil equivalent from Nuevo'scurrent size of just over 200 million barrels. Proved developedreserves will represent more than 70% of the total and 83% of thetotal will be oil. Additionally, the new entity will have moreexploitation opportunities than existed for Nuevo on a stand-alonebasis.

OMNE STAFFING: Looks to Bederson & Company for Financial Advice---------------------------------------------------------------Omne Staffing, Inc., and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the District Of New Jersey to employ Bederson & Company, LLP as their financial advisors.

The Debtors tell the Court that they desire to retain Bederson to:

a. prepare the Debtors' financial information including, but not limited to, Schedules, Monthly Operating Reports, Statements of Financial Affairs and such other documents that the Debtors are required to file under the Bankruptcy Code;

c. review, analyze and critique the Debtors' business plan and financial projections, including underlying assumptions to determine whether same are reasonable;

d. review of the Debtors' business expenses and provide recommendations, if necessary, with respect to expense reduction;

e. investigate what should be undertaken with respect to prepetition acts, conduct, property, liabilities and financial condition of the Debtors, their management and creditors, including the operation of their business, and, as appropriate, avoidance actions;

f. review and analysis of proposed transactions for which the Debtors may seek Court approval;

g. assist with the preparation of a liquidation analysis; and

h. provide testimony, if necessary, in connection with confirmation of a plan of reorganization or liquidation or other contested matters.

Headquartered in ranford, New Jersey, Omne Staffing, Inc., filed for chapter 11 protection on April 9, 2004 (Bankr. D. N.J. Case No. 04-22316). John K. Sherwood, Esq., at Lowenstein Sandler represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed both estimated debts and assets of over $10 million.

The soccer club is among the assets to be sold under Parmalat's recovery plan outlined by Commissioner Bondi in March 2004. Leading sports newspaper, Gazzetta dello Sport, valued the club at EUR50,000,000, according to Reuters.

Creditor protection is expected to enhance the club's chances of being sold, as this would mean it could reclaim assets confiscated from it last month. Italy's tax collector, Agenzie delle, had earlier confiscated assets belonging to the club for failure to pay taxes amounting to EUR54,000,000.

PEABODY ENERGY: Re-Elects Four Directors in Annual Meeting----------------------------------------------------------Peabody Energy has announced the re-election of four members of its board of directors, for three-year terms expiring in 2007, at the company's annual meeting of stockholders held in St. Louis Thursday.

Re-elected directors include William A. Coley, former President of Duke Power; Irl F. Engelhardt, Chairman and Chief Executive Officer of Peabody Energy; William C. Rusnack, former President and Chief Executive Officer of Premcor, Inc.; and Alan H. Washkowitz, Managing Director of Lehman Brothers Inc.

Peabody Energy Board Of Directors

B. R. (Bobby) Brown served as Chairman, President and Chief Executive Officer of Consol Energy Inc. and its predecessor companies from 1977 - 1999. He also was Senior Vice President of DuPont, Consol's controlling shareholder, from 1982 - 1992. Mr. Brown's experience includes Senior Vice President at Conoco and President and Chief Executive Officer of Remington Arms Co., Inc. He is currently a director of Remington Arms and Delta Trust Bank and is a former director of PNC Bank and Carnegie Mellon University. Mr. Brown is an inductee in the West Virginia Mining Hall of Fame and a recipient of the Distinguished Service Award from the National Mining Association.

William A. Coley served as President of Duke Power and retired in February 2003 after a 37-year career with the organization. He was named Senior Vice President of Customer Operations and elected to the Duke Power board of directors in 1990, named President of the Associated Enterprises Group in 1994 and elected President in 1997. Mr. Coley graduated from the Georgia Institute of Technology with a bachelor's degree in electrical engineering. Mr. Coley is a registered professional engineer in North Carolina and South Carolina. He is a member of the North Carolina Economic Development Board and co-chair of the Governor's Business Council for Fiscal Reform. He has served as trustee of Queens University of Charlotte and Union Theological Seminary in Richmond, Va. He is also a director of CT Communications, Inc., SouthTrust Corporation and British Energy plc.

Irl F. Engelhardt is Chairman and Chief Executive Officer of Peabody Energy. He joined the company in 1979 after a decade of management consulting experience and held various officer-level positions prior to being named Chief Executive Officer in December 1990. His business experience includes: Group Executive and Director of Hanson Industries; Co-Chief Executive Officer of The Energy Group; Chairman of Cornerstone Construction and Materials; Chairman of Suburban Propane; Chairman of Citizens Power; and Chairman of Peabody Resources Limited (Australia). He received a bachelor of science degree in accounting from the University of Illinois in 1968 and a master's in business administration from Southern Illinois University in 1971. Among a number of industry leadership positions, he is Chairman of the Center for Energy and Economic Development, Co-Chairman of the Coal-Based Generation Stakeholders Group and the National Mining Association's Sustainable Development Committee and Health Reform Committee and a member of The Business Roundtable and the Conservation Fund's Corporate Council. Mr. Engelhardt is also a Director of U.S. Bank N.A. in St. Louis and serves on the board of a number of civic organizations.

Dr. Henry Givens is President of Harris-Stowe State College. He began his career in education as a teacher in the Webster Groves School District, was named principal of the nation's first prototype magnet school and assistant to the superintendent of schools. He was the first African-American to serve as Assistant Commissioner of Education in Missouri, holding the post for five years. Dr. Givens earned his bachelor's degree at Lincoln University, his master's degree at the University of Illinois and his doctorate at Saint Louis University. He has participated in post-doctoral studies in higher education administration at Harvard University and has been recognized with dozens of national, state and local awards, including two honorary doctorates of Humane Letters from Lincoln University and St. Louis University. He is affiliated with numerous educational organizations and honor societies.

William E. (Wilber) James is a Founding Partner of RockPort Capital Partners LLC, a venture fund specializing in energy and environmental technology and advanced materials. He is also Chairman of RockPort Group, an international oil trading and investment banking company. Prior to joining RockPort, Mr. James co-founded and served as Chairman and Chief Executive Officer of Citizens Power LLC, a leading power marketer. Previously, Mr. James was a co-founder of the non-profit Citizens Energy Corporation and served as Chairman and Chief Executive Officer of Citizens Corporation, its for-profit subsidiary, from 1987 to 1996. Mr. James holds a bachelor of arts degree from Colorado College. He serves on the board of directors of the African Wildlife Foundation, the National Peace Corps Association's Advisory Council and the Cape Ann Historical Association.

Robert B. Karn III is a financial consultant and former managing partner in financial and economic consulting with Arthur Andersen in St. Louis. Before retiring from Andersen five years ago, Mr. Karn served in a variety of accounting, audit and financial roles over a 33-year career, including Managing Partner in charge of the global coal mining practice from 1981 through 1998. He is a Certified Public Accountant and has led a number of civic organizations. Mr. Karn serves on the board of directors of Natural Resource Partners, a coal-oriented master limited partnership that trades on the New York Stock Exchange.

Henry (Jack) E. Lentz is an Advisory Director for Lehman Brothers Inc. He joined Lehman Brothers in 1971 and became a Managing Director in 1976. In 1988, Mr. Lentz left Lehman Brothers to serve as Vice Chairman of Wasserstein Perella Group, Inc. In 1993, he returned to Lehman as a Managing Director and served as head of the firm's worldwide energy practice. In 1996, he joined the Merchant Banking Group as a Principal and in 2003 became a consultant to the Merchant Banking Group. Mr. Lentz is currently a director of Rowan Companies, Inc. and Curbo Ceramics, Inc. Mr. Lentz holds an MBA from the Wharton School of Business at the University of Pennsylvania.

William C. Rusnack is the former President and Chief Executive Officer of Premcor Inc. Prior to joining Premcor in April 1998, Mr. Rusnack was President of ARCO Products Company, the refining and marketing division of Atlantic Richfield Company. During his 31-year career at ARCO, he was also President of ARCO Transportation Company and Vice President of Corporate Planning. Mr. Rusnack is a member of the American Petroleum Institute as well as a member of the Dean's Advisory Council of the Graduate School of Business at the University of Chicago and the National Council of the Olin School of Business at Washington University in St. Louis. He serves on a number of civic and corporate boards, including Sempra Energy, The Urban League of Metropolitan St. Louis, the St. Louis Science Center and the St. Louis Opera Theatre. He holds a bachelor of science in general chemistry from Indiana University of Pennsylvania and an MBA from the University of Chicago.

Dr. James R. Schlesinger served as U.S. Secretary of Energy, U.S. Secretary of Defense and Central Intelligence Agency (CIA) Director. He is currently Chairman of the Board of Trustees of the MITRE Corporation and serves as Counselor to the Center for Strategic and International Studies. Dr. Schlesinger was U.S. Secretary of Energy from 1977 to 1979. He held senior executive positions for three U.S. Presidents, serving as Chairman of the U.S. Atomic Energy Commission from 1971 to 1973, Director of the Central Intelligence Agency in 1973 and Secretary of Defense from 1973 to 1975. Prior positions include Assistant Director of the Office of Management and Budget, Director of Strategic Studies at the Rand Corporation, Associate Professor of Economics at the University of Virginia and Board of Governors of the Federal Reserve System. Dr. Schlesinger holds bachelor of arts, master's and doctoral degrees from Harvard University. He is a trustee at the Atlantic Council, Center for Global Energy Studies; a fellow of the National Academy of Public Administration; and a member of the American Academy of Diplomacy.

Dr. Blanche M. Touhill is Chancellor Emeritus and Professor Emeritus at the University of Missouri - St. Louis. Dr. Touhill began her career in education at Queens College, City University of New York, before joining UMSL as an assistant professor. Dr. Touhill was named Vice Chancellor for Academic Affairs in 1987 and assumed the responsibilities of Interim Chancellor in 1990. She was named Chancellor in 1991. Dr. Touhill holds bachelor's and doctoral degrees in history and a master's degree in geography from St. Louis University. Dr. Touhill has served on a number of civic and corporate boards, including Trans World Airlines, Delta Dental, the Urban League of St. Louis, Civic Progress and the Missouri Botanical Gardens. In 1997, she was named the St. Louis Citizen of the Year.

Sandra A. Van Trease is President and Chief Executive Officer of UNICARE, one of the fastest-growing segments of Wellpoint Health Networks, Inc. Wellpoint is a large health insurance company, based in California, which last year purchased RightCHOICE Managed Care, Inc. Ms. Van Trease held the positions of President and Chief Operating Officer and previously Executive Vice President and Chief Financial Officer of RightCHOICE. Prior to joining RightCHOICE in 1994, she was a Senior Audit Manager with Price Waterhouse. She is a Certified Public Accountant and Certified Management Accountant. Ms. Van Trease serves on the boards of a number of civic organizations in the St. Louis area and on U.S. Bancorp's St. Louis board of directors.

Alan H. Washkowitz is a Managing Director of Lehman Brothers Inc. and part of the firm's Merchant Banking Group, with responsibility for the oversight of Lehman Brothers Merchant Banking Partners II L.P. Mr. Washkowitz joined Kuhn Loeb & Co. in 1968 and became a general partner of Lehman Brothers in 1978 when Kuhn Loeb & Co. was acquired. Prior to joining the Merchant Banking Group, Mr. Washkowitz headed Lehman Brothers' Financial Restructuring Group. He is currently a director of CP Kelco Inc., L-3 Communications Corporation and K&F Industries, Inc. Mr. Washkowitz holds an MBA from Harvard University and a Juris Doctorate from Columbia University.

About Peabody Energy

Peabody Energy (NYSE: BTU) is the world's largest private-sector coal company, with 2003 sales of 203 million tons of coal and $2.8 billion in revenues. Its coal products fuel more than 10 percent of all U.S. electricity and more than 2.5 percent of worldwide electricity.

As reported in the Troubled Company Reporter's March 22, 2004edition, Fitch Ratings has assigned a 'BB' rating to PeabodyEnergy's (BTU) new $250 million senior unsecured notes due 2016.At the same time Fitch affirms Peabody's 'BB+' rating on therevolving credit facility and bank term loan and the 'BB' ratingon its $450 million senior unsecured notes due 2013. The RatingOutlook remains Positive.

Also, as previously reported, Standard & Poor's Ratings Servicesaffirmed all its ratings on Peabody Energy Corp. and assigned its'BB-' rating to the company's $200 million senior unsecured notesdue 2016. In addition, Standard & Poor's assigned its '1' recoveryrating to Peabody's $1.3 billion senior secured credit facility.This and the existing 'BB+' rating on the credit facility (whichis one notch higher than the corporate credit rating) indicate ahigh expectation of full recovery of principal in the event of adefault.

PHARMANETICS INC: Stock Now Trading on the OTC Bulletin Board-------------------------------------------------------------PharmaNetics, Inc. (NASDAQ-SmallCap: PHAR) announced that it has been notified by NASDAQ that, as a result of its failure to meet the stockholders' equity, market value of securities or minimum net income listing requirements, the common stock will be delisted from the NASDAQ SmallCap Market on May 13, 2004.

PharmaNetics' common stock continues trading on the OTC Bulletin Board under the same PHAR trading symbol, without interruption, following the delisting.

PharmaNetics, Inc. conceived the term "theranostics," defining an emerging field of medicine that enables physicians to monitor the effect of antithrombotic agents in patients being treated for angina, myocardial infarction (heart attack), stroke, and pulmonary and arterial emboli. PharmaNetics formerly developed, manufactured and marketed rapid turnaround diagnostics to assess blood clot formation and dissolution. PharmaNetics tests are based on its proprietary, dry chemistry Thrombolytic Assessment System.

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As reported in the Troubled Company Reporter's April 23, 2004 edition, PharmaNetics, Inc. (NASDAQ-SmallCap: PHAR) announced that its 2003 financial statements contain a going concern qualification from the Company's auditors. At December 31, 2003, the Company's cash and cash equivalents totaled $8.5 million, which the Company believes is sufficient to finance its legal proceedings against Aventis Pharmaceuticals.

"The action recognized improving business conditions and a growing business base, resulting in improved profitability and stronger debt-protection measures. The ratings continue to reflect the company's relatively concentrated revenue base, high debt levels, and rapid technology and marketplace evolution, as well as its good position in its niche market and strong customer relationships," said Standard & Poor's credit analyst Bruce Hyman.

RFMD supplies power amplifiers for cellular phones--about 40% of sales--and other semiconductors for wireless handsets, principally for global system for mobile communications (GSM) technology. The company has about a 50% share of the cellphone power amplifier market, and has been gaining share in the industry. Additional served markets include cellular base stations, wireless local-area networks (LANs) and Bluetooth short-range radio, totaling about 6% of sales. The majority of products are based on gallium-arsenide (GaAs) technology, manufactured in-house, while the company uses foundries to manufacture its non-GaAs products. Customer concentration is high, with Nokia Corp. about 30% of revenues, although this concentration has improved from the 45% range several quarters ago; two other customers were each above 10% of sales in the March quarter. Technology changes in the cellphone industry are quite rapid, potentially challenging the company's R&D resources.

Revenues declined 15% sequentially in March, a mix of normal seasonality and the company's still-high reliance on Nokia, whose cell phones lost some market share in the quarter. Still, sales were 18% above prior-year results. RFMD has been gaining power amplifier market share, and is investing in wireless LAN and Bluetooth technologies, intending to capture share in those spaces as well. EBITDA was about $28 million in the quarter, 17% of sales. Still, profitability has varied substantially in recent quarters, with single-digit margins in the year-ago period.

Total revenues in the first quarter of 2004 were $57.3 million, compared to $51.7 million in the year earlier period. Site leasing revenue of $33.9 million and site leasing gross profit (tower cash flow) of $23.7 million were up 9.3% and 16.9%, respectively, over the year earlier period. Same tower revenue and site leasing gross profit growth on the 3,022 towers owned at March 31, 2003 and 2004 were 10% and 15%, respectively. Site leasing gross profit margin in the first quarter was a record 70.0%, a 110 basis point sequential improvement over the fourth quarter of 2003 and a 460 basis point improvement over the first quarter of 2003. Site leasing contributed 97.1% of the Company's gross profit in the first quarter of 2004.

Site development revenues were $23.4 million compared to $20.7 million in the year earlier period. Site development gross profit margin was 3.0% in the first quarter, compared to 9.6% in the year earlier period. As a result of the Company's periodic review of the services business segment, its strategic benefits and minimum profitability targets, the Company has decided to sell its services business in the western portion of the United States. In the first quarter, this portion of the services segment produced $6.5 million of site development revenue and $150 thousand of site development gross profit.

Selling, general and administrative expenses were $7.3 million in the first quarter, compared to $8.2 million in the year earlier period. Net loss from continuing operations for the first quarter was ($48.0) million or ($.86) per share, compared to ($32.8) million or ($.64) per share in the year earlier period. Net loss in the first quarter of 2004 was ($47.9) million, or ($.86) per share, compared to a net loss of ($33.8) million, or ($.66) per share, in the year earlier period. The Company's refinancing activities contributed materially to the first quarter net loss. Excluding $22.2 million of charges relating to the write-off of deferred financing fees and extinguishment of debt, first quarter 2004 net loss per share from continuing operations was ($.46) and net loss per share was ($.46). Adjusted EBITDA was $17.2 million, compared to $15.1 million in the year earlier period, or a 13.8% increase. Adjusted EBITDA margin was 30.1%, a 100 basis point improvement over the prior quarter.

Net cash interest expense and non-cash interest expense, was $13.7 million and $7.3 million, respectively, in the first quarter of 2004, compared to $17.0 million and $5.1 million in the year earlier period.

Cash provided by operating activities for the three months ended March 31, 2004 was $2.5 million, compared to a use of cash of $4.8 million for the three months ended March 31, 2003. First quarter 2004 results included a $15.2 million benefit from the conversion of a short-term investment into cash.

Investing Activities

During the quarter, SBA sold 10 towers, ending the quarter with 3,083 towers. Excluding 51 towers which were held for sale, SBA owned, as of March 31, 2004, 3,032 towers in continuing operations. Capital expenditures for the first quarter were $2.0 million, down from $6.1 million in the year earlier period.

Financing Activities and Liquidity

SBA ended the first quarter with $275 million outstanding under its $400 million senior credit facility, $282.5 million of 93/4% senior discount notes, $339.1 million of 10 1/4% senior notes, and net debt of $867.2 million. Debt amounts as of March 31, 2004 exclude approximately $4.4 million of deferred gain from a termination of a derivative in 2002. In the first quarter, SBA repurchased and/or redeemed the remaining $65.7 million in principal amount of its 12% senior discount notes, and repurchased $67.3 million of its 10 1/4% senior notes. The Company paid cash of $61.9 million plus accrued interest and issued 1.5 million shares of its Class A common stock. Cash payments were funded through the December issuance of 9 3/4% senior discount notes by the Company and SBA Telecommunications, Inc. as co-issuers and the January refinancing of its senior credit facility. Liquidity at March 31, 2004 was $59.3 million, consisting of $29.5 million of cash and restricted cash, and $29.8 million of additional availability under the senior credit facility.

Since March 31, 2004, the Company has repurchased in open market purchases an additional $12.8 million principal amount of its 10 1/4% senior notes, reducing the amount outstanding to $326.3 million. The Company paid cash of $12.6 million plus accrued interest.

"We were very pleased with our first quarter results in the leasing segment of our business," commented Jeffrey A. Stoops, President and Chief Executive Officer. "Our customers were and continue to be very active. In terms of leasing activity, it was our most productive quarter in almost two years, and we ended the quarter with the highest backlog of pending leases in eighteen months. We believe the leasing environment will continue to be strong throughout 2004. As a result of first quarter results and pending activity, we are raising our full year 2004 site leasing revenue and site leasing gross profit guidance.

"Our cash flow profile continued to improve in the quarter, driven primarily by our actions to retire our high-yield indebtedness and reduce our average cost of debt. As a result of these and other activities, we have also increased our full year 2004 guidance for cash flow from operating activities. We intend to pursue additional debt retirement or refinancing opportunities to accelerate our expected organic growth in future cash flows."

Outlook

The Company has provided its Second Quarter 2004 and updated its Full Year 2004 Outlook for anticipated results from continuing operations. The Full Year 2004 Outlook has been increased in the areas of site leasing revenue, site leasing gross profit, Adjusted EBITDA and cash flow from operating activities. The Full Year 2004 Outlook has been decreased in the areas of site development revenue and total revenues to reflect the Company's decision to exit its services business in the western portion of the United States, and in net cash interest expense to reflect the positive impact of the Company's high-yield debt retirement, repurchases and senior credit facility refinancing activity.

About SBA Communications

SBA is a leading independent owner and operator of wireless communications infrastructure in the United States. SBA generates revenue from two primary businesses - site leasing and site development services. The primary focus of the Company is the leasing of antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts. Since it was founded in 1989, SBA has participated in the development of over 25,000 antenna sites in the United States.

As reported in the Troubled Company Reporter's March 9, 2004edition, Standard & Poor's Ratings Services raised its corporatecredit rating on Boca Raton, Florida-based wireless tower operatorSBA Communications Corp. to 'CCC+' from 'CCC'. The seniorunsecured debt rating, which was raised to 'CCC-' from 'CC',remains two notches below the corporate credit rating due to thematerial amount of priority obligations relative to the estimatedasset value. These ratings were removed from CreditWatch, wherethey were placed with positive implications on Jan. 23, 2004. Theratings outlook is stable.

"The upgrades are based on improved liquidity prospects as theresult of the company refinancing its old credit facility with the$400 million bank credit facility," explained Standard & Poor'scredit analyst Michael Tsao. "Without the refinancing, the companyfaced significant debt amortization in each of the years duringthe 2004-2007 time period. However, with minimal amortization onthe new bank facility, the risk of SBA Communications having aliquidity issue before 2008 has been substantially lessened."

Nonetheless, ratings on SBA Communications still reflect itssubstantial leverage, which is a consequence of its past expansionactivities. During the 1999-2001 time frame, the company incurredmore than $650 million of debt to finance the acquisition andbuilding of about 3,500 towers, based on the expectation thatgrowth in wireless services would strongly bolster demand forlimited tower space. However, as wireless carriers scaled backtheir capital spending beginning in 2001, largely in response tomarket conditions, SBA Communications was unable to grow EBITDAfast enough and reduce leverage despite trimming expenses andselling more than 780 towers in 2003. At Dec. 31, 2003, leveragewas an aggressive 13x debt to annualized EBITDA (12.7x afteradjusting for operating leases).

SELAS: Says Cash Enough to Meet Operating Needs through Apr. 2005-----------------------------------------------------------------Selas Corporation of America is an international firm with operations and sales that engages in the design, development, engineering and manufacturing of micro-miniature components, systems and molded plastic parts primarily for the hearing instrument, electronics, telecommunications, computer and medical equipment industries. The Company, headquartered in Arden Hills, Minnesota has facilities in California, Singapore, and Germany, and operates directly or through subsidiaries. Within discontinued operations, the Company has facilities in Pennsylvania and Japan. The Company is a Pennsylvania corporation that was funded in 1930.

The Company did not meet certain covenants during all quarters of 2003, for which it obtained waivers from the bank. At December 31, 2003, Selas was in compliance with all covenants of the amended agreement.

Selas believes that the amended credit facility combined with funds expected to be generated from operations, the available borrowing capacity through its revolving credit loan facilities, the potential sale of certain assets, curtailment of the dividend payment and control of capital spending will be sufficient to meet its anticipated cash requirements for operating needs through April 1, 2005.

However, the Company's ability to pay the principal and interest on its indebtedness as it comes due will depend upon current and future performance. Performance is affected by general economic conditions and by financial, competitive, political, business and other factors. Many of these factors are beyond Selas' control.

If, however, the Company does not generate sufficient cash or complete such financings on a timely basis, it may be required to seek additional financing or sell equity on terms, which may not be as favorable as it could have otherwise obtained. No assurance can be given that any refinancing, additional borrowing or sale of equity will be possible when needed, or that Selas will be able to negotiate acceptable terms. In addition, access to capital is affected by prevailing conditions in the financial and equity capital markets, as well as the Company's financial condition.

SPECTRUM PHARMA: Resumes Trading on NASDAQ National Market ----------------------------------------------------------Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI) announced that its application for listing on the NASDAQ National Market System (NMS) has been approved. The Company's Common Stock, which currently trades on the NASDAQ SmallCap Market, will be eligible for trading on NASDAQ NMS, with the change expected to be effective on Friday, May 7, 2004. The Company's ticker symbol will remain SPPI.

"Return to NASDAQ National Market was one of Spectrum's stated goals for 2004, and I am pleased to learn from NASDAQ that our application has been approved," said Rajesh C. Shrotriya, M.D., Chairman, Chief Executive Officer and President of Spectrum. "We believe this is another important achievement for Spectrum, especially in light of how far we have come as a company in the past 20 months -- from a position where we had hardly any cash, negative working capital and faced a possible NASDAQ delisting, to one where we have three anti-cancer drugs in late-stage clinical development, with one in phase 3 and two in phase 2, three Abbreviated New Drug Applications for generic drugs under review by the FDA, a stronger cash position of more than $45 million in cash and equivalents, and now a NASDAQ National Market Listing. This listing requires fulfillment of more stringent listing requirements than the SmallCap market, including a minimum bid price, minimum market capitalization, certain shareholders equity, required minimum number of market makers, etc. We believe that a National Market listing will enhance our visibility among brokerage firms and institutional investors, as this listing is a regulatory requirement for many of them. An expanded and more diverse investor base is an important part of our strategy to deliver shareholder value."

About Spectrum Pharmaceuticals

Spectrum Pharmaceuticals is an oncology-focused pharmaceutical company engaged in the business of acquiring, developing and commercializing proprietary drug products which have a primary focus on the treatment of cancer and related disorders, as well as generic drug products in various indications. The Company's lead drug, satraplatin, is a phase 3 oral, anti-cancer drug being co-developed with GPC Biotech AG, and has been granted fast-track status by the United States Food and Drug Administration (FDA). Elsamitrucin, a phase 2 drug, will initially target non-Hodgkin's lymphoma. EOquin(TM), a phase 2 drug, is being studied in the treatment of superficial bladder cancer. In addition, the Company has filed with the FDA three Abbreviated New Drug Applications for the generic drugs ciprofloxacin, carboplatin and fluconazole. For additional information, including SEC filings, visit the Company's web site at http://www.spectrumpharm.com/

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The report of Spectrum Pharmaceuticals' independent public accountants, Arthur Andersen LLP, for the For the fiscal year ended December 31, 2003, contains this paragraph:

"The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments relating to recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern."

SPIEGEL GROUP: Wants Until September 7 to File Chapter 11 Plan --------------------------------------------------------------The Spiegel Group Debtors ask the Court to further extend their exclusive periods to:

(i) file a Chapter 11 plan through and including September 7, 2004; and

(ii) solicit acceptances for that plan through and including November 8, 2004.

James L. Garrity, Jr., Esq., at Shearman & Sterling, LLP, in New York, notes that the Debtors have taken substantial steps to reduce costs and improve operations throughout their three Merchant Divisions and support subsidiaries. Throughout the Chapter 11 process, the Debtors have examined their restructuring alternatives to maximize creditors' recoveries, and have regularly consulted with the Creditors Committee. Spiegel, Inc.'s Restructuring Committee, which is composed of two independent directors and Spiegel's Acting Chief Executive Officer, has played an active role in the formulation of potential exit strategies. The members of the Restructuring Committee have participated in several meetings and teleconferences with the Creditors Committee with respect to these strategies.

Regarding the next steps in formulating a plan of reorganization, the Debtors have announced that they have instructed their investment bankers, Miller Buckfire Lewis Ying & Co., to solicit parties who may be interested in acquiring the Eddie Bauerbusiness. With respect to the Newport News business, the Debtors have entered into an asset sale transaction with Pangea Acquisition 8 Limited and an auction and sale hearing for the Newport News business are presently scheduled on May 11, 2004.

Mr. Garrity also informs the Court that the Debtors are in preliminary negotiations with a party interested in purchasing the Spiegel Catalog business. The Debtors cautioned that there can be no assurance that any purchase transaction with Spiegel Catalog, Inc., will occur. The Debtors also stated that sufficient uncertainty exists as to whether a potential buyer would assume the majority of the current Spiegel Catalog work force. Therefore, the Debtors are in the process of rationalizing the Spiegel Catalog business in the event a purchase transaction, if any, should be negotiated with an interested party and then approved by the Court, and to minimize the ongoing operating losses of the Spiegel Catalog business. These rationalization efforts include the lay-off of around 200 employees at Spiegel Catalog and Spiegel, which takes place over the two-month period beginning April 20, 2004.

Given the size and complexity of their Chapter 11 cases and the business and restructuring matters that must be resolved, as well as the constructive steps that they have taken to date, the Debtors require additional time to create and build acceptance for a plan, Mr. Garrity says.

The Debtors have continued take the necessary steps to permit them to begin the process of formulating a reorganization plan. Although significant progress has been made, much work remains to be done. The Creditors Committee has indicated its consent to the proposed extension of the Exclusive Periods because the extension would allow the Debtors to complete the Eddie Bauer marketing and sale process, while simultaneously developing a consensual plan of reorganization, without being potentially distracted by alternative plans of reorganization being filed by other parties-in-interest.

Mr. Garrity contends that the requested extension will not harm creditors but rather maximize the value of the Debtors' estates for the benefit of creditors and other stakeholders. An extension of the Exclusive Periods would enable the Debtors to harmonize the multitude of diverse and competing interests in a reasoned and well-balanced manner.

The Court will convene a hearing on May 11, 2004 to consider the Debtors' request. Accordingly, in a bridge order, Judge Blackshear extends the Debtors' Exclusive Plan Proposal Period to May 12, 2004.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and $1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000)

SPIEGEL GROUP: April 2004 Sales Down by 10% to $104.4 Million-------------------------------------------------------------The Spiegel Group reported net sales of $104.4 million for the four weeks ended May 1, 2004, a 10 percent decrease compared to net sales of $115.6 million for the four weeks ended April 26, 2003.

For the 17 weeks ended May 1, 2004, total sales declined 19 percent to $426.8 million from $529.2 million in the same period last year.

The company also reported that comparable-store sales for its Eddie Bauer division decreased 1 percent for the four-week period and 2 percent for the 17-week period ended May 1, 2004, compared to the same periods last year.

The Group's net sales from retail and outlet stores fell 15 percent for the month compared to the same period last year, primarily due to the impact of store closings. The company operated 435 stores at the end of April 2004 compared to 556 stores at the end of April 2003. Most of the store closings resulted from actions taken as part of the company's ongoing reorganization process.

The Group's direct net sales (catalog and e-commerce) decreased 4 percent for the month compared to the same period last year, reflecting lower sales for Eddie Bauer and Spiegel Catalog, offset somewhat by sales growth for Newport News. The sales increase for Newport News was primarily driven by higher customer response to its catalog mailings.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and $1,706,761,176 in debts.

STELCO INC: Posts $563 Million Net Loss for the Full Year 2003 --------------------------------------------------------------Stelco Inc. (TSX:STE) released its 2003 Annual consolidated audited financial statements and its first quarter 2004 unaudited consolidated financial statements together with Management's Discussion and Analysis, disclosure which assists readers to understand the Corporation's financial results and condition.

On January 29, 2004, Stelco Inc. obtained an order from the Superior Court of Justice providing creditor protection under the Companies' Creditors Arrangement Act (CCAA). On the same day, Stelco also obtained ancillary protection in the U.S. pursuant to an order made under Section 304 of the U.S. Bankruptcy Code. The Canadian order granting protection covers Stelco Inc. and its subsidiaries, Stelpipe Ltd., Stelwire Ltd., CHT Steel Company Inc., and Welland Pipe Ltd. as Applicants. Other subsidiaries, including Alta Steel Ltd., Norambar Inc., and Stelfil Lt‚e are not Applicants in the proceedings.

For the year ended December 31, 2003, Stelco reported a net loss of $563 million ($5.61 per common share) compared with restated net earnings of $1 million ($0.09 loss per common share) for the year ended December 31, 2002.

In respect to the fourth quarter 2003, the net loss was $395 million ($ 3.89 per common share) on production of 1,329,000 semi finished tons and shipments of 1,273,000 tons. This compares to fourth quarter 2002 (restated) net earnings of $20 million ($0.17 per common share) on production of 1,205,000 tons and shipments of 1,083,000 tons.

In fourth quarter 2003, the Corporation recorded two significant non-cash items: $87 million pre-tax charge to write off the remaining net book value of the plate mill assets and a $304 million future income tax asset valuation allowance, reflecting the probability that, under the Corporation's existing cost structure, these future income tax assets will not be utilized.

As a result of a change in accounting policy with respect to blast furnace relines in 2003, the 2002 Financial Statements have been restated as necessary to make them comparative to the Financial Statements issued in 2003.

Cash usage for the year 2003 amounted to $114 million and, as a result, the Corporation's net short-term debt increased from $78 million to $192 million.

Partly offsetting the above was $52 million provided by working capital changes with the two main contributing factors being a $188 million reduction in inventory and a $115 million reduction in accounts payable and accrued. The significant reduction in accounts payable was mainly due to suppliers reducing or eliminating credit terms as a result of the Corporation's deteriorating financial condition.

As at December 31, 2003, net liquidity on a consolidated basis was $163 million, consisting of $355 million of available lines of credit plus $23 million of cash and cash equivalents, less $215 million of line of credit drawings.

Stelco Inc. on a parent company basis, had net liquidity of $125 million based on $325 million of the $350 million credit facility being available. The $25 million reduction in credit availability was caused by $10 million of issued letters of credit and $15 million arising from insufficient eligible collateral caused by low year end accounts receivable. Subsequent to the year-end 2003, eligible collateral increased, reinstating the $15 million.

First Quarter 2004

Stelco Inc. also reported a net loss of $36 million ($0.36 per common share) in first quarter 2004 compared with a loss of $44 million ($0.46 per common share) in first quarter 2003. Included in the first quarter loss is $23 million related to accounting for "Reorganization items" as a result of the January 29, 2004 filing under CCAA, primarily consisting of an adjustment of the convertible debenture balance to the anticipated claim amount and professional fees. Production in the first quarter 2004 was 1,366,000 semi-finished tons, up from the 1,329,000 tons for the previous quarter and 1,301,000 tons for the same period in 2003, primarily due to improved market demand, consolidation in the U.S. steel industry, and increased shipments to the automotive sector.

On a consolidated basis, cash usage in the first quarter 2004 amounted to $31 million bringing net short-term debt to $223 million. This included a reclassification of $16 million related to the refinancing of the bank debt at Norambar Inc. (formerly Stelco McMaster). The balance was mainly associated with the entities in protection under CCAA consisting of $4 million cash usage from operating activities (including working capital), $10 million for a Directors' and Officers' Trust, and $3 million of capital spending. Working capital (included in the $4 million cash usage from operating activities) used $27 million of cash in the first quarter 2004 with notable items being $106 million increase in accounts receivable due to higher sales that were partly offset by a $65 million increase in accounts payable as the Corporation began to restore trade credit after its filing for CCAA.

At March 31, 2004, the Corporation's consolidated net liquidity was $243 million compared with $163 million as at December 31, 2003. The main change in available credit was the $75 million DIP facility acquired as part of the Corporation's CCAA filing. The net liquidity of the CCAA applicants at March 31, 2004, was $196 million, compared with $126 million as at December 31, 2003.

As a result of the restructuring under CCAA, the Corporation has and will continue to record reorganization and restructuring items directly associated with the restructuring. These "reorganization and restructuring items" represent revenues, expenses, assets and liabilities that can be directly associated with the reorganization and restructuring of the business under CCAA, and do not relate to the normal operating activities of the Corporation.

Courtney Pratt, President and Chief Executive Officer, stated, "The results for 2003 show clearly that the company had no choice but to seek protection under the Companies' Creditors Arrangement Act (CCAA). That does not mean, however, that Stelco can't emerge as a viable and competitive entity through this process."

He also stated, "The Board and the newly constituted management group are committed to a successful restructuring. The elements of a restructuring plan will be determined through discussions to be held with all stakeholders. We intend to deal with these groups in a fair and responsible manner and regret the impact the Court-supervised restructuring has had on all constituencies. A successful restructuring offers the prospect of greater benefit than any other available alternative. We believe Stelco can emerge as a strong industry player. We recognize that everyone will be contributing to the restructuring through concessions and compromises that will be necessary. Perhaps shareholders will feel the impact of the restructuring most. Like many restructurings, shareholders of Stelco are unlikely to receive any real value for their shares at the end of the day."

Stelco Inc. is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Consolidated net sales in 2003 were $2.7 billion.

The rating reflects the average credit quality of the underlying securities, which consist of 86 high-yield corporate bonds, and the 'A+' rating of the borrower under the securities-lending agreement, Lehman Brothers Inc.

Interest and principal distributions to the certificateholders will be made in the amounts received by the trust from the underlying securities.

The final scheduled distribution date is Aug. 1, 2015.

TEXAS PETROCHEM: Exits Bankruptcy with New $130 Million Financing-----------------------------------------------------------------Texas Petrochemicals LP (TPC) announced that it has closed on its new $130 million exit financing package, and therefore, has emerged from bankruptcy.

The company's new financing package consists of the following:

1) the sale of $20 million in new common equity provided by a group comprised of Castlerigg Master Investments, Ltd., an affiliate of Sandell Asset Management Corp., RCG Carpathia Master Fund, Ltd., an affiliate of Ramius Capital Group, LLC and unsecured creditors that elected to participate in a rights offering provided in the plan of reorganization;

2) the issuance of $60 million in new 7.25 percent Senior Secured Convertible Notes due in 2009, which were purchased by the Sandell and Ramius funds and unsecured creditors electing to participate in the rights offering; and

The initial common stock ownership of the reorganized TPC, after the closing of the above financings and prior to any conversion of the Convertible Notes, will be approximately 20 percent by Sandell/Ramius and 80 percent by the previous unsecured creditors of TPC. Sandell/Ramius will hold approximately 63 percent of the Convertible Notes initially and the previous unsecured creditors will hold 37 percent. The Convertible Notes are exercisable at the option of the holder, at any time, on the basis of approximately 107 new common shares for each $1,000 face amount of Convertible Notes held. Over the next several months, the company will endeavor to register the common stock and Convertible Notes with the Securities and Exchange Commission and list the common stock for trading with the NASDAQ National Market System.

All pre petition bankruptcy obligations will be satisfied in conjunction with the closing, after which the Company will have approximately $32 million available under the new revolving credit facility for general corporate purposes.

"We are extremely pleased to have finalized our financial restructuring, which combined with our repositioning of the company to focus on our butadiene and specialty chemicals businesses, positions us to resume our leadership position in the C4 chemicals industry," said Carl Stutts, president and CEO of TPC. "Our strong businesses and sound capital structure give us significant financial flexibility. We look forward to continuing to strengthen our valued customer and supplier relationships."

The company is a producer of quality C4 chemical products widely used as chemical building blocks for synthetic rubber, nylon carpets, adhesives, catalysts and additives used in high-performance polymers. The company has manufacturing facilities in the industrial corridor adjacent to the Houston Ship Channel and operates product terminals in Baytown, Texas and Lake Charles, Louisiana. For more information about the company's products and services, visit the Company online at http://www.txpetrochem.com/

TRICOM: Net Capital Deficit Widens to $77.3 Million at March 31---------------------------------------------------------------Tricom, S.A. (NYSE: TDR) announced consolidated unaudited financial results for the first quarter ended March 31, 2004.

Results of Continuing Operations

Continuing operations consist of the Company's local service, long distance, mobile, cable television and broadband data transmission and Internet services in the Dominican Republic, as well as the Company's wholesale and retail international long distance operations in the U.S. The Company's financial results continue to be significantly affected by currency devaluation despite the growth and improved performance of certain of its key business segments. During the 2004 first quarter, the average value of the Dominican peso with respect to the U.S. dollar declined by approximately 103 percent from the same period last year and by 26 percent from the 2003 fourth quarter.

"During the first quarter, the Company took steps to improve its financial and operating position in the face of continuing difficult market conditions, marked by currency devaluation," said Carl Carlson, chief executive officer. "We took measures to strategically streamline our expenses and preserve cash, providing us with additional financial flexibility throughout our restructuring process. We have been greatly encouraged by the response and the support we have received from our key constituents, including our employees, customers and suppliers since the announcement of our restructuring process. During the first quarter, we invested prudently in our key growth drivers and improved our customer base by continuing to expand our presence within the postpaid and corporate market segments. Despite a difficult operating environment, we had a strong quarter in terms of net line additions. Going forward, we will continue to work aggressively to execute on our strategy for long-term success", said Carlson.

Operating revenues from continuing operations totaled $43.3 million for the 2004 first quarter, a 23.6 percent decrease from the 2003 first quarter. Adjusted EBITDA totaled $11.0 million for the 2004 first quarter, compared to Adjusted EBITDA of $17.6 million for the same period last year.

First quarter long distance revenues decreased by 13.3 percent to $21.5 million, primarily as a result of lower international long distance traffic, derived from the Company's U.S.-based wholesale and retail operations, coupled with the impact of currency devaluation on outbound international and domestic long distance revenues generated in the Dominican Republic.

Domestic telephony revenues totaled $11.7 million in the 2004 first quarter, a 31 percent decrease from the 2003 first quarter. The decrease in domestic telephony revenues was primarily the result of the decline in value of the Dominican peso. At March 31, 2004, the Company had approximately 147,000 lines in service, a 0.6 percent decrease from lines in service at March 31, 2003. Total lines in service at the end of the 2004 first quarter grew by approximately 2.1 percent on a sequential basis, due to intensified sales efforts. Net line additions for the quarter totaled approximately 3,000, the highest reported quarterly growth since the 2002 second quarter.

Mobile revenues decreased by 32 percent to $6.3 million in the 2004 first quarter from the 2003 first quarter primarily as result of currency devaluation and the effect of a previously announced change in mobile revenue recognition. Beginning in the 2003 second quarter, the Company began to account for mobile revenues net of sales commission fees. Mobile subscribers at March 31, 2004, totaled approximately 276,000, a 36 percent decrease from mobile subscribers at March 31, 2003. As previously announced, the Company reduced the period in which a mobile prepaid customer can receive incoming calls without generating outgoing calls. As a result, the Company identified and voluntarily disconnected approximately 190,000 mobile subscribers during the 2004 first quarter that had not utilized the Company's services for an extended period of time. The decline in the Company's mobile subscriber base was offset in part by a higher number of postpaid mobile subscribers during the 2004 first quarter, which grew 6 percent from December 31, 2003.

Cable revenues totaled $2.6 million in the 2004 first quarter, a 34.5 percent decrease from the same period last year. The decrease is primarily the result of currency devaluation affecting the conversion of Dominican peso-generated cable revenues into U.S. dollars, together with a lower average subscriber base. To offset the impact of currency devaluation on cable revenues, the Company instituted price increases for cable services that were too recent to have a significant impact on the 2004 first quarter results. At March 31, 2004, cable subscribers totaled approximately 60,000, a 12.6 percent decrease from cable subscribers at March 31, 2003. The decline in cable subscribers is primarily attributable to a weak economic environment.

Data and Internet revenues totaled $1.1 million in the 2004 first quarter, representing a 27.8 percent year-over-year decrease. The decrease in data and Internet revenues resulted primarily from currency devaluation, partially offset by a year-over-year increase in data and Internet subscribers. At March 31, 2004, data and Internet access accounts totaled approximately 14,000, representing a 35.7 percent increase from data and Internet subscribers at March 31, 2003.

Consolidated operating costs and expenses from continuing operations totaled $52.7 million in the 2004 first quarter compared to $58.9 million in the 2003 first quarter. The decrease in 2004 first quarter operating costs and expenses is primarily the result of lower selling, general and administrative (SG&A) expenses and depreciation and amortization charges, offset in part by approximately $2.1 million in restructuring costs and other non-recurring expenses related to the Company's financial restructuring initiatives.

SG&A expenses declined by 30.4 percent to $12.9 million in the 2004 first quarter, primarily due to continuing expense reduction efforts and operating efficiencies, as well as lower Dominican peso-denominated expenses resulting from currency devaluation. Cost of sales and services decreased by 2.2 percent to $21.0 million during the 2004 first quarter, primarily due to the decline in the volume of international long distance minutes, as well as lower cable programming fees resulting from contract renegotiations. The decrease was offset by increased transport and access charges due to higher domestic interconnection rates during the 2004 first quarter. Interconnection rates in the Dominican Republic are established in Dominican pesos but subject to change semiannually based on the U.S. dollar exchange rate variation.

Interest expense totaled approximately $15.4 million in both the 2004 and 2003 first quarters. The Company suspended interest payments on its unsecured debt obligations beginning in October 1, 2003. During the 2004 first quarter the Company recorded $1.4 million in foreign currency exchange gain compared to a foreign currency exchange gain of approximately $767,000 during the 2003 first quarter.

In the 2003 first quarter, the Company recognized $1.8 million in losses from discontinued operations in Central America. The Company will continue to report losses from discontinued operations in the periods they occur. Net loss from continuing operations totaled $23.3 million, or $0.36 per share for the 2004 first quarter, compared to a net loss from continuing operations of $19.0 million, or $0.29 per share during 2003 first quarter.

Liquidity and Capital Resources

Total debt, including capital leases and commercial paper, amounted to $453.7 million at March 31, 2004, compared to $449.5 million at December 31, 2003. The increase in total debt at March 31, 2004 is largely due to the reclassification of $5.4 million related to an early lease cancellation previously accounted for as an accrued expense at December 31, 2003. Total debt included $200 million principal amount of 11-3/8% Senior Notes due in September 2004, approximately $34.7 million of secured debt and approximately $219.0 million of unsecured bank and other debt. At March 31, 2004, the Company had approximately $7.4 million of cash on hand. For the three-months ended March 31, 2004 the Company's net cash provided by operating activities totaled approximately $5.6 million, compared to net cash used in operating activities of $427,000 for the year-ago period. Capital expenditures totaled $766,000 during the 2004 first quarter, representing an approximate 84.2 percent decrease from the same period last year.

On February 19, 2004, the Company announced the sale of its Central American trunking assets for a purchase price of approximately $12.5 million payable in stages. The estimated net proceeds of the sale to be received by the Company, totaling approximately $9 million, will be used to fund the Company's short-term working capital requirements, providing it with the financial flexibility to pursue a financial restructuring of its balance sheet. As part of its ongoing strategy to streamline its operations, reduce costs and improve its financial and liquidity position, the Company continues to evaluate potential divestments of other under-performing or non-strategic assets.

As of March 31, 2004, Tricom S.A.'s balance sheet shows a stockholders' equity deficit of $77,330,008 compared to a defit of $53,980,779 at December 31, 2003.

Financial Restructuring Update

As previously announced, the Company is continuing negotiations with its secured and unsecured lenders, which include an ad hoc committee of holders of its 11-3/8% Senior Notes due 2004, regarding an agreement on a consensual financial restructuring of its balance sheet. Although there is no assurance that such an agreement will occur, the Company is optimistic that these negotiations will lead to a consensual agreement in the near term. The Company's future results and its ability to continue operations will depend on the successful conclusion of the restructuring of its indebtedness.

Since these negotiations are ongoing, the treatment of the Company's existing secured and unsecured creditors, as well as the interest of its existing shareholders, is uncertain at this time. However, the financial restructuring could possibly result in the conversion of at least all or a substantial portion of the Company's outstanding 11-3/8% Senior Notes and unsecured commercial bank debt into equity in a manner that would reduce substantially, or eliminate, the value of the Company's current equity. Accordingly, investors in the Company's debt and equity securities may be substantially diluted or lose all or substantially all of their investment in the Company's securities.

About TRICOM

Tricom, S.A. is a full service communications services provider in the Dominican Republic. We offer local, long distance, mobile, cable television and broadband data transmission and Internet services. Through Tricom USA, we are one of the few Latin American based long distance carriers that is licensed by the U.S. Federal Communications Commission to own and operate switching facilities in the United States. Through our subsidiary, TCN Dominicana, S.A., we are the largest cable television operator in the Dominican Republic based on our number of subscribers and homes passed. For more information about Tricom, please visit http://www.tricom.net/

TWODAYS PROPERTIES: Redmond & Nazar Serves as Insolvency Counsel----------------------------------------------------------------TwoDays Properties, LLC and its debtor-affiliates ask the U.S. bankruptcy Court for the District of Kansas for permission to engage Redmond & Nazar, LLP as their counsel in their chapter 11 proceedings.

The Debtors report that Redmond & Nazar has extensive experience in Chapter 11 cases and is familiar with their business and financial affairs.

Redmond & Nazar is expected to:

a) advise the Debtors of its rights, powers and duties as a Debtors-in-Possession, including those with respect to the continued operation and management of its business and property;

b) advise the Debtors concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions;

c) investigate into the nature and validity of liens asserted against the property of the Debtors, and advising the Debtors concerning the enforceability of said liens;

d) investigate and advise the Debtors concerning and taking such action as may be necessary to collect income and assets in accordance with applicable law, and recover property for the benefit of the Debtors' estates;

e) prepare on behalf of the Debtors such applications, motions, pleadings, orders, notices, schedules and other documents as may be necessary and appropriate, and reviewing the financial and other reports to be filed herein;

f) advise the Debtors concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed and served herein;

g) counsel the Debtors in connection with the formulation, negotiation and promulgation of plan or plans of reorganization and related documents; and

h) perform such other legal services for and on behalf of the Debtors as may be necessary or appropriate in the administration of the cases.

The hourly rates of Redmond & Nazar professionals who will perform the majority of services in this retention are:

TwoDays Properties LLC is a Wichita, Kansas based management and real estate company, which owns the real estate under 12 restaurants, and in turn leases all 12 to the operating companies. The Company filed for chapter 11 protection on April 8, 2004 (Bankr. D. Kans. Case No. 04-11792). Edward J. Nazar, Esq., at Redmond & Nazar LLP and Douglas S. Draper, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed both estimated debts and assets of over $10 million.

Mr. Cummings asserts that the Pilots Committee needs its own financial consultant and cannot share FTI Consulting with the Retired Salaried & Management Employees Committee. The Retiree Committee has indicated that it reserves the exclusive right to access FTI. Sharing financial consultants would become unworkable if the Retirees and the Pilots take conflicting positions during the Section 1114 process. The Court also has not entered a joint retention order authorizing the Pilots to engage FTI.

Mr. Cummings also notes that the Retiree Committee controls the direction of FTI's efforts. The Retiree Committee assigned all of FTI's current projects. It will oversee FTI's preparation of expert reports and conduct the examination of any FTI consultant that takes the witness stand. Also, there is not enough time for the Pilots Committee to wait-and-see if FTI has the resources to accommodate both the Retirees and the Pilots before the legal deadlines.

The Debtors have multiple advisors that will be prepared for the Section 1114 negotiations and hearings. It is only fair that the Pilots have an equal opportunity to make their case and be heard in negotiations. As a result, the Pilots Committee cannot adequately represent its constituency unless it retains Gordian as financial consultants. Without Gordian, about 5,800 retirees represented by the Pilots Committee will be prejudiced.

Gordian, headquartered in New York City, is an entrepreneurial investment bank and financial advisory firm that specializes in complex capital raising, M&A activities, distressed financial restructurings and creditor advisory services. Gordian, founded in 1988, is an affiliate of Allied Capital Corporation. Gordian's professionals have experience with Section 1114 proceedings, and can analyze and evaluate complex business structures, financial documents and business plans.

As financial consultants, Gordian will:

(1) assist the Pilots Committee on proposed modifications to the Pilots' insurance-related benefits;

(2) analyze the Debtors' financial plans, projections and business models, and their assumptions;

(3) confer with the Debtors on their financial condition and business plans;

Despite the Court's admonishment to the Section 1114 Committees to share professionals, the Pilots Committee wants to retain Gordian, even though the Retiree Committee has already retained FTI Consulting. According to James H.M. Sprayregen, Esq., at Kirkland & Ellis, the Pilots Committee "offers no legitimate explanation as to why FTI cannot serve the interests of both committees." Gordian will simply burden the Debtors and their estate with additional inquiries, requests for documents, meetings and costs.

Mr. Sprayregen emphasizes that there is no current conflict and one may never arise. In other words, the Pilots Committee speaks only in the abstract and hypothetical. Another financial advisor would be "a costly and wasteful response to these speculative concerns." The Court can easily solve the Pilots' lack of an advisor-client relationship. The Court can approve a retention application with broadened terms.

Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. the Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000)

At the same time, Standard & Poor's lowered its counterparty credit and financial strength ratings on UnumProvident's insurance operating subsidiaries to 'BBB+' from 'A-'. The outlook is stable.

"The ratings actions reflect concerns about the consistency of risk controls and valuation practices," said Standard & Poor's credit analyst Rodney Clark. "These issues have led to significant reserve charges and asset impairments in the past several quarters, including the $856 million of intangible impairments and $111 million reserve strengthening announced in the company's first quarter earnings announcement."

These factors have also contributed to marginal operating performance in the company's largest line of business, U.S. group disability insurance. Somewhat offsetting these factors are strong operating company capital adequacy following several recent capital initiatives, substantial scale and market penetration in the group and individual disability insurance areas, and improved investment risk profile.

The outlook reflects the effects of strengthened capital adequacy, improved investment risk, and corrective measures taken to limit the downside on the closed block of individual disability income and to improve profitability on U.S. group disability insurance.

Despite those measures, profit growth in 2004 is expected to be modest, with consolidated pretax operating margins of about 10% before one-time items, and modestly negative GAAP net income for the full year including special charges. Fixed-charge coverage is expected to improve to about 5x by 2005. As the company executes its turnaround plan U.S. group and individual sales are expected to decrease by more than 10%, partially offset by a modest growth in the company's Colonial segment and solid double-digit growth in the U.K.

UNUMPROVIDENT CORPORATION: Fitch Ratings Remain on Negative Watch-----------------------------------------------------------------UnumProvident Corporation (UNM) and its subsidiary insurance companies ratings remain unaffected by UNM's announcement of first-quarter 2004 operating results and plans to restructure the reporting of its pre-1995 individual disability income insurance (old block) business, according to Fitch Ratings. The ratings remain on Rating Watch Negative, where they were placed on Feb. 5, 2004, following UNM's fourth quarter $286 million after tax charge to boost reserves in its group long-term disability (LTD) business. As detailed in the press release issued on that date, Fitch will resolve the Rating Watch status after the completion of a detailed reserve study. The rating action affects approximately $2.8 billion of debt outstanding.

Key elements of the restructure include creating a separate reporting segment for the old block resulting in the write down of $856 million of GAAP intangible assets, strengthening reserves in this segment by approximately $110 million, securing an excess of loss reinsurance arrangement to mitigate the impact of future negative reserve development, and raising $300 million of hybrid equity capital. Fitch believes the restructuring has been structured in a way that minimizes the impact on the company's capital, leverage, and earnings going forward. Accordingly, Fitch is not taking any rating actions.

The old block consists of business written prior to 1995 and is in run-off as no new policies are being written. Despite a low GAAP return-on-equity, the business is profitable and has generated positive cash flow. As part of the segmentation, UNM allocated certain intangibles to the new segment resulting in the write-off of $207 million of goodwill, $367 million of value of business acquired (VOBA), and $282 million of deferred acquisition cost (DAC) for a total charge of $856 million incurred in the first quarter of 2004.

At the same time, UNM has added a level of loss deterioration protection on the old block of business with an excess of loss reinsurance arrangement with Berkshire Hathaway. Berkshire will assume 66% of losses in excess of $7.9 billion, up to an aggregate limit of $2.5 billion over time. To offset the statutory capital impact of the reinsurance transaction, UNM has arranged for a $300 million mandatory convertible security offering in a private placement. The proceeds will be used to reduce holding company debt to maintain leverage ratios, increase holding company liquidity and restore statutory risk-based capital to the pre-segmentation levels.

Fitch intends to resolve UNM's Rating Watch in the next four-to-six weeks. UNM's ratings remain on Rating Watch Negative pending a review of their reserves under Fitch's model. If reserves are determined by Fitch to be deficient by a meaningful level, it is likely that all ratings will be downgraded. If reserves are determined to be adequate, it is likely to result in an affirmation of all ratings and removal from watch status.

Based in Chattanooga, Tennessee, UnumProvident Corp. is the Nation's largest provider of group and individual disability insurance. UNM reported total assets of $50.5 billion and shareholders' equity of $7.2 billion at March 31, 2004.

US AIRWAYS: Insolvent Carrier Hints at Chapter 22 Filing--------------------------------------------------------US Airways, Inc., emerged from bankruptcy protection in March 2003 and has continued to incur losses from operations. For the quarter ending March 31, 2004, USAir reports a $181 million net loss. That loss wipes-out all shareholder equity in the carrier and the company's Mar. 31 balance sheet now shows a $64 million shareholder deficit. At the parent company level, US Airways Group, Inc.'s Mar. 31 balance sheet shows $30 million in shareholder equity.

In a regulatory filing with the Securities and Exchange Commission on May 8, 2004, Anita P. Beier, US Airways' Chief Accounting Officer, explains that the primary factors contributing to these losses include the continued downward pressure on industry pricing and significant increases in fuel prices. The pressure on industry pricing is resulting from the rapid growth of low-fare low-cost airlines, the increasing transparency of fares available through internet sources and other changes in fare structures which result in lower fares for many business and leisure travelers.

Possible Chapter 22

Given the Company's continued operating losses, the Company is pursuing a transformation plan to further reduce cost per available seat mile to levels competitive with low-cost carriers such as America West and JetBlue. Key elements of this plan include changes in marketing and distribution techniques; employee compensation, benefits and work rules; and airline scheduling and operations. The Company expects to begin implementation of the actions needed to achieve the cost reductions by mid-year 2004. However, since the plan will require changes in the Company's collective bargaining agreements, there can be no assurance that the plan can be achieved. While the Company's preference is to complete its transformation on a consensual basis, failure to achieve the above-described competitive cost structure will force the Company to reexamine its strategic options, including but not limited to asset sales or a judicial restructuring.

Regional Jet Financing

A key component to the Company's strategy is the increased usage of regional jets. The Company uses regional jets to fly into low-density markets where large-jet flying is not economical as well as to replace turbo-props with regional jets to better meet customer preferences. In May 2003, US Airways Group entered into agreements to purchase a total of 170 regional jets from Bombardier, Inc., and Empresa Brasileira de Aeronautica S.A. The Company secured financing commitments from General Electric and from the respective airframe manufacturers for approximately 85% to 90% of these jets. These commitments are subject to certain credit standards or financial tests. Among the applicable credit standards under the aircraft financing commitments is the requirement that US Airways Group or US Airways maintains a minimum corporate credit rating of "B-" by Standard & Poor's or "B3" by Moody's Investor Service, as well as customary conditions precedent.

On April 30, 2004, US Airways and GE agreed to certain changes in their regional jet financing agreement. These changes provided new conditions precedent for financing for scheduled aircraft deliveries through September 30, 2004. The new conditions precedent replace an existing no material adverse change (MAC) condition precedent with: (i) a no MAC since April 30, 2004 condition precedent; (ii) certain specific financial tests, and (iii) other conditions precedent. The financial tests include, but are not limited to, compliance with financial covenants in the ATSB Loan concerning fixed charge ratios and ratios of indebtedness to earnings before interest, debt, and aircraft rent (EBITDAR), as well as minimum EBITDAR requirements for the Company. GE's financing commitment with respect to regional jets through September 30, 2004 is also conditioned on US Airways being permitted under its ATSB Loan to use its regional jets financed by GE utilizing mortgage debt as cross-collateral for other obligations of US Airways to GE. In addition, the April 30, 2004 amendment contains a provision for financing regional jet deliveries beyond September 30, 2004 subject to revised conditions precedent based on the successful implementation of US Airways' transformation plan and the expected financial performance of the restructured Company, both in a manner acceptable to GE.

Credit Rating Downgrades

On May 5, 2004, S&P downgraded US Airways Group's and US Airways' corporate credit ratings to CCC+. As a result of the downgrade, GE, Embraer and Bombardier have the right to discontinue financing the Company's regional jet purchases, unless US Airways is able to meet alternative minimum financial tests. US Airways is not yet able to determine whether it meets these tests. US Airways does not presently have alternative sources of financing regional jet purchases nor does it have the ability to purchase regional jets without financing. The Company is in negotiations with GE and the aircraft manufacturers to amend or waive the credit rating condition precedent, as well as the alternative minimum financial tests (if necessary). If US Airways is unable to meet the alternative minimum financial tests or the Company is not successful in obtaining such waivers or amendments, US Airways would be required to pay cancellation fees and/or liquidated damages of up to $90 million for the remainder of 2004 and $21 million in 2005 if US Airways is unable to obtain financing for the regional jet aircraft scheduled to be delivered during those periods.

In the event that US Airways is unable to obtain financing, it will likely be unable to execute its regional jet business plan, which would in turn likely have a material adverse effect on the Company's future liquidity, results of operations (i.e., revenue contribution from regional jet operations) and financial condition.

As previously reported in the Troubled Company Reporter, KPMG has expressed doubt, since emerging from bankruptcy just over a year ago, about USAir's ability to continue as a going concern.

USG CORP: Wants to Expand Scope of PwC's Employment as Consultants------------------------------------------------------------------The USG Corporation Debtors seek the Court's authority to expand their employment of PricewaterhouseCoopers, LLP, as their Special Sarbanes-Oxley Consultant, in connection with their Chapter 11 cases.

The Debtors relate that PwC is currently providing them with certain non-professional vendor services regarding internal information technology. Because these vendor services do not constitute professional services, they are not included in the scope of PwC's employment.

Pursuant to the terms of PwC's current engagement as Special Sarbanes-Oxley Consultants, PwC has assisted the Debtors in complying with the requirements of the Sarbanes-Oxley Act of 2002. It is anticipated that PwC will continue to provide the Debtors with a wide range of services to ensure compliance with the S-O Act. Among other measures that they are taking, the Debtors have developed an internal "whistle-blower" program called "My Safe Workplace," which sets forth certain procedures for the reporting and investigation of any suspected incidents of fraud, violations of USG policy or other improprieties within USG. The Debtors believe that the My Safe Workplace program, along with USG's other programs and policies regarding workplace ethics and fraud prevention and investigation, constitute best corporate practices along the lines of the S-O Act. These programs and policies require that reports of fraud, violations of the Debtors' internal policies and other improprieties within USG be investigated.

Therefore, the Debtors want to engage PwC to perform certain aspects of these investigations as the need for those services may arise from time to time. Because reports of impropriety require immediate action and skilled investigation, the Debtors believe that expanding the scope of PwC's employment to permit it to address these incidents as they may arise and without delay is appropriate.

The specific forensic auditing services that PwC may perform include:

(a) interviewing USG employees or individuals outside the company;

(b) reviewing written and electronic documents;

(c) analyzing data for evidence relevant to matters under investigation; and

(d) documenting the results of PwC's findings and recommendations.

In addition to the forensic auditing services, the Debtorsanticipate that PwC will perform certain internal auditing services to assess internal controls, including controls contained within and surrounding the Debtors' internal information technology systems, and to test the effectiveness of and identify gaps in their internal controls.

The specific internal auditing services that PwC will perform include:

(i) documenting the results of PwC's work, findings, and recommendations.

The Debtors maintain that PwC is particularly well suited to provide the types of services they require. PwC has a vast domestic and international accounting and consulting practiceand has extensive experience in providing S-O Act-related services as well as forensic accounting and internal auditing services. PwC is the world's largest professional services organization, employing 125,000 people in 142 countries. PwC's service offerings include audit, assurance and business advisory services, merger and acquisition services, corporate finance and recovery services, human resource services, and global tax services. PwC's global reach, combined with its depth of resources, knowledge and experience, allows it to deliver top quality service to their clients.

The team of PwC professionals who will be providing forensic services to the Debtors are part of PwC's Chicago Corporate Investigations and Forensic Services practice. Professionals who will be providing internal auditing services to USG are part of PwC's Chicago Systems and Process Assurance and Internal Auditing Services practices.

PwC has notably provided professional services to the Debtors in the past and thus is familiar with the Debtors' structure and operations.

PwC will charge the Debtors for its services on an hourly basis in accordance with its hourly rates in effect on the date services are rendered:

The Debtors will also reimburse PwC for actual and necessary out-of-pocket expenses.

Dina M. Norris, a partner at PwC, assures the Court that the firm does not have any connection with the Debtors, their creditors, the U.S. Trustee or any other party with an actual or potential interest in these Chapter 11 cases.

Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case Nos. 01-02094). David G. Heiman, Esq., at Jones, Day, Reavis & Pogue and Paul E. Harner, Esq., at Jones, Day, Reavis & Pogue represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 215/945-7000)

UTEX INDUSTRIES: Wants to Pay $20,000 Prepetition Trade Claims--------------------------------------------------------------Utex Industries, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, for its stamp of approval to pay the prepetition trade claims of its critical vendors.

The Debtors point out that a fundamental aspect of it efforts to minimize disruption during this case is the ability to maintain its relationships with the important parties that supply goods and provide services and customers who have entered into prepaid contracts.

Because these relationships are critical to the continued operation of the Company's business during and after the chapter 11 case, the Debtor requests authority to pay in full all non-contingent, liquidated, undisputed unsecured prepetition operational claims, including claims of trade suppliers and vendors, and customers who have prepaid the Debtor for goods and services not yet provided, in the ordinary course of business.

As of the Petition Date, the Debtor estimates that outstanding Trade Claims total less than $20,000, including Trade Claims paid by checks that were issued prior to the Petition Date, but have not yet cleared through the Debtor's bank account.

Unless it is authorized to pay the Trade Claims, its Trade Creditors may well reconsider the favorable terms generally available to the Debtor and critical to its smooth operations. The Debtor submits that such a result should be avoided, because it needs continued and uninterrupted service from these creditors to efficiently operate its business. The Debtor is also concerned that if it were not able to honor all prepaid orders it may lose a substantial amount of its customer base.

Headquartered in Houston, Texas, Utex Industries, Inc. -- http://www.utexind.com/-- has been in the fluid sealing industry since 1940. It has expanded its market base to include: oil and gas, petrochemical, pulp and paper, power generation, fossil and nuclear fuel, agriculture, municipalities and a variety of other industries. The Company filed for chapter 11 protection on March 26, 2004 (Bankr. S.D. Tex. Case No. 04-34427). William A. Wood III, Esq., at Bracewell & Patterson, LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed over $10 million in estimated assets and over $100 million in estimated debts.

VANTAGEMED: Net Capital Deficit Widens to $1.17M at March 31, 2004 ------------------------------------------------------------------VantageMed Corporation (OTC Bulletin Board: VMDC.OB) announced financial results for the quarter ended March 31, 2004. Total revenues for the quarter ended March 31, 2004 were $5.1 million compared to $5.3 million for the quarter ended March 31, 2003.

Net loss before interest, taxes, depreciation and amortization (EBITDA) totaled $574,000 for the quarter ended March 31, 2004. This compares to an EBITDA loss of $722,000 for the year ago quarter ended March 31, 2003. We present EBITDA because we believe it provides an alternative measure by which to evaluate our performance. EBITDA is not a measurement defined by GAAP and should not be considered an alternative to, or more meaningful than, information presented in accordance with GAAP.

VantageMed reported a net loss of $706,000, or $0.08 per basic and diluted share, for the quarter ended March 31, 2004 compared to a net loss of $965,000, or $0.11 per basic and diluted share, for the year ago quarter ended March 31, 2003. The improvement in net loss is a direct result of continued cost reduction efforts and operational efficiencies.

At March 31, 2004, VantageMed Corporation's balance sheet shows a total stockholders' deficit of $1,172,000 compared to a deficit of $483,000 at December 31, 2003.

Richard M. Brooks, Chairman and Chief Executive Officer, commented, "We are pleased with our sales and marketing efforts as we have seen a continued strong demand for our RidgeMark product. In the first quarter, we signed 65 RidgeMark orders as compared to 11 from a year ago, which shows continued acceptance of the RidgeMark product in the marketplace. Installations of these systems have not happened as quickly as we would have liked, thus increasing our backlog and delaying revenue to future periods. We have made recent key hires in our client services organization, including a new Vice President of Client Services, Jeff Schuett and are expecting improved delivery capabilities in future periods."

About VantageMed

VantageMed is a provider of healthcare information systems and services distributed to over 12,000 customer sites nationally. Our suite of software products and services automates administrative, financial, clinical and management functions for physicians and other healthcare providers and provider organizations.

WEIRTON: Affiliates Ask Court to Extend Lease Decision Period-------------------------------------------------------------Debtors FW Holdings, Inc., and Weirton Venture Holdings Corporation ask the Court to extend through the confirmation of a Chapter 11 plan the deadline for them to assume or reject all of their unexpired non-residential real property leases, including, but not limited to, the MABCO Lease.

To recall, FW Holdings and Weirton Venture recently filed for Chapter 11 protection. Pursuant to Section 365(d)(4) of the Bankruptcy Code, FW Holdings and Weirton Venture have 60 days from their Petition Date to assume or reject their Unexpired Leases. Unless the statutory time period is extended, the Leases not assumed on or before the deadline are deemed rejected.

FW Holdings is a party to a sales/leaseback transaction with MABCO Steam Company, LLC, relating to a Foster Wheeler Steam Generation Facility. The FW Facility was originally owned by Weirton and was transferred to FW Holdings on October 26, 2001, which in turn, transferred the FW Facility to MABCO on the same day.

MABCO members provided Weirton with certain trade debt concessions and some cash, and MABCO agreed to lease the FW Facility back to FW Holdings pursuant to that certain Lease Agreement dated as of October 26, 2001. FW Holdings, Weirton and MABCO are parties to several additional agreements relating to the MABCO Transaction.

In February 2004, FW Holdings filed a complaint against MABCO. FW Holdings wants the Court to:

(a) declare the MABCO Transaction and MABCO Agreements to be a disguised financing and not a true lease transaction; and

(b) direct MABCO to turnover the property that is the subject of the MABCO Lease.

Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania, relates that the assumption and assignment of the MABCO Lease and the other MABCO Agreements are subject to and conditioned on the closing of the sale transaction to the Buyer and related terms and conditions of the Assignment Agreement.

Mr. Freedlander argues that the effect of assuming any Lease at this time would unfairly elevate the obligations from prepetition unsecured claims to administrative priority expense claims to the prejudice of all non-Lessor creditors of FW Holdings and Weirton Venture's estates if the Lease is ultimately rejected.

In the alternative, if FW Holdings and Weirton Venture rejected any Lease at this time, they could lose facilities that they need as a reorganized debtor. Furthermore, the assumption of MABCO Lease by FW Holdings at this time would preclude FW Holding's right to pursue the MABCO Suit.

Mr. Freedlander contends that extending the lease decision period will not prejudice any lessor under any of the Leases because all of their rights are preserved. Similarly, it will not constitute an admission by any Debtor that any Lease, including the MABCO Lease, is a true lease. FW Holdings and Weirton Venture's rights with respect to the characterization of the Leases, including the MABCO Lease, are expressly reserved.

In the event that the Closing of the Sale Transaction does not occur, FW Holdings and Weirton Venture will determine which of the properties they would need for reorganization and which they do not as part of formulating a business plan. Because FW Holdings and Weirton Venture have not yet determined which properties they need and the Leases represent only a portion of their real property interests, they cannot determine at this time whether they will need to assume or reject the Leases. An extension of the lease decision period will allow FW Holdings and Weirton Venture the opportunity to study and determine which properties they will need for a successful reorganization.

FW Holdings and Weirton Venture do not want to forfeit the Leases as a result of the "deemed rejected" provision of Section 365(d)(4) of the Bankruptcy Code or, in the alternative, assume the Leases and incur a substantial, unnecessary administrative obligation in the event that the Sale Transaction does not close and FW Holdings and Weirton Venture are otherwise forced to liquidate their assets.

Moreover, because their overall reorganization structure may significantly impact whether the Leases are necessary to their ongoing business, FW Holdings and Weirton Venture believe that it would be imprudent to make a final assumption or rejection decision outside of the plan of reorganization process, or at least until they know whether the Closing of the Sale Transaction will occur.

WILSONS THE LEATHER: April Store Sales Decrease to $17.9 Million----------------------------------------------------------------Wilsons The Leather Experts Inc. (Nasdaq:WLSN) reported sales of $17.9 million for the four weeks ended May 1, 2004, compared to $21.5 million for the four weeks ended May 3, 2003. Year-to-date sales have increased 2.6% to $97.8 million compared to $95.3 million for the same period last year. Sales for the month of April and the current fiscal year included approximately $0.7 million and $20.8 million, respectively, in liquidation sales resulting from the transfer of inventory to an independent liquidator in conjunction with the previously announced closing of approximately 111 stores.

Comparable store sales decreased 3.5% for the four weeks ended May 1, 2004; this decrease compares to a 1.0% decrease in comparable store sales for the four weeks ended May 3, 2003. Year-to-date comparable stores sales have decreased 2.0% compared to flat comparable store sales for the same period last year. Comparable store sales for the month and year to date do not include sales from the stores that are being liquidated, as the liquidation sale in these stores began on January 23, 2004.

Commenting on these results, Joel Waller, Chief Executive Officer said, "Sales in our mall-based stores have been negatively impacted by reduced levels of new and clearance merchandise. While this negatively impacted comparable store sales, our margin rate was positively impacted."

Mr. Waller continued, "We have completed the liquidation sales in the 111 stores that we are closing. In addition, we have made positive progress with respect to our refinancing of the 11 1/4% Senior Notes and look forward to continuing our efforts to drive our business forward."

About Wilsons Leather

Wilsons Leather is the leading specialty retailer of leather outerwear, accessories and apparel in the United States. As of May 1, 2004, Wilsons Leather operated 458 stores located in 45 states and the District of Columbia, including 334 mall stores, 107 outlet stores and 17 airport stores. The Company, which regularly supplements its permanent mall stores with seasonal stores during its peak selling season from October through January, operated 229 seasonal stores in 2003.

As reported in the Troubled Company Reporter's April 20, 2004 edition, Wilsons The Leather Experts Inc. (Nasdaq:WLSN) announced that it entered into an agreement to amend its revolving credit facility.

WORLDCOM INC: Fitch Withdraws D Ratings Following Bankruptcy Exit-----------------------------------------------------------------Fitch Ratings has withdrawn the following ratings of Worldcom, Inc. and its subsidiaries.

Worldcom, Inc. has emerged from bankruptcy protection and has been renamed MCI, Inc. and the debt underlying the ratings ceases to exist.

WRENN ASSOCIATES: Section 341(a) Meeting Scheduled for May 19-------------------------------------------------------------The United States Trustee will convene a meeting of Wren Associates, Inc.'s creditors at 2:00 p.m., on May 19, 2004, in Room 122 at the Norris Cotton Federal Building, 275 Chestnut Street, First Floor, Manchester, New Hampshire 03101. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors.

Headquartered in Merrimack, New Hampshire, Wrenn Associates, Inc. -- http://www.wrenn.com/-- is a construction management firm. The Company filed for chapter 11 protection on April 16, 2004 (Bankr. D. N.H. Case No. 04-11408). William S. Gannon, Esq., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $4,037,000 in total assets and $7,778,494 in total debts.

* CPAs to Launch Nat'l Financial Literacy Initiative on May 17--------------------------------------------------------------WHAT: The American Institute of Certified Public Accountants (AICPA) to announce 360 Degrees of Financial Literacy, a national public education campaign.

WHO: The Honorable David M. Walker, Comptroller General of the United States and Head of the General Accounting Office S. Scott Voynich, Chairman of the American Institute of CPAs Barry C. Melancon, President and CEO of the American Institute of CPAs

Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test.

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